Analysts Just Shaved Their CytomX Therapeutics, Inc. (NASDAQ:CTMX) Forecasts Dramatically

Today is shaping up negative for CytomX Therapeutics, Inc. (NASDAQ:CTMX) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

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After the downgrade, the consensus from CytomX Therapeutics' seven analysts is for revenues of US$31m in 2026, which would reflect a painful 73% decline in sales compared to the last year of performance. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of US$0.40 per share in 2026. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$50m and losses of US$0.27 per share in 2026. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Check out our latest analysis for CytomX Therapeutics

Analysts lifted their price target 15% to US$7.07, implicitly signalling that lower earnings per share are not expected to have a longer-term impact on the stock's value.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 65% by the end of 2026. This indicates a significant reduction from annual growth of 22% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 22% annually for the foreseeable future. It's pretty clear that CytomX Therapeutics' 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 next year, suggesting all may not be well at CytomX Therapeutics. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that CytomX Therapeutics' revenues are expected to grow slower than the wider market. The increasing price target is not intuitively what we would expect to see, given these downgrades, and we'd suggest shareholders revisit their investment thesis before making a decision.

There might be good reason for analyst bearishness towards CytomX Therapeutics, like major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 1 other flag we've identified.

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 with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.