Analysts Are Betting On Cytokinetics, Incorporated (NASDAQ:CYTK) With A Big Upgrade This Week

Celebrations may be in order for Cytokinetics, Incorporated (NASDAQ:CYTK) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the latest upgrade, the 13 analysts covering Cytokinetics provided consensus estimates of US$54m revenue in 2023, which would reflect a disturbing 43% decline on its sales over the past 12 months. Losses are expected to increase slightly, to US$4.45 per share. However, before this estimates update, the consensus had been expecting revenues of US$47m and US$4.64 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

Check out our latest analysis for Cytokinetics

Despite these upgrades, the analysts have not made any major changes to their price target of US$61.13, implying that their latest estimates don't have a long term impact on what they think the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Cytokinetics, with the most bullish analyst valuing it at US$80.00 and the most bearish at US$48.00 per share. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 43% by the end of 2023. This indicates a significant reduction from annual growth of 40% over the last five 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. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Cytokinetics is expected to lag the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Cytokinetics is moving incrementally towards profitability. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Cytokinetics.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential risks with Cytokinetics, including dilutive stock issuance over the past year. You can learn more, and discover the 2 other risks 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 upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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