Analysts Just Shaved Their Calyxt, Inc. (NASDAQ:CLXT) Forecasts Dramatically

Market forces rained on the parade of Calyxt, Inc. (NASDAQ:CLXT) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

After the downgrade, the consensus from Calyxt's four analysts is for revenues of US$23m in 2021, which would reflect a not inconsiderable 10% decline in sales compared to the last year of performance. Losses are predicted to fall substantially, shrinking 24% to US$0.96. However, before this estimates update, the consensus had been expecting revenues of US$33m and US$0.73 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out our latest analysis for Calyxt

The consensus price target fell 28% to US$7.63, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Calyxt, with the most bullish analyst valuing it at US$16.00 and the most bearish at US$7.50 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 13% by the end of 2021. This indicates a significant reduction from annual growth of 111% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 14% per year. It's pretty clear that Calyxt's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Calyxt. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Calyxt's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Calyxt.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Calyxt's financials, such as a short cash runway. Learn more, and discover the 2 other warning signs we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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