Analysts Are Betting On Editas Medicine, Inc. (NASDAQ:EDIT) With A Big Upgrade This Week

Editas Medicine, Inc. (NASDAQ:EDIT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The revenue forecast for next year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.

Following the upgrade, the consensus from 16 analysts covering Editas Medicine is for revenues of US$21m in 2025, implying a painful 65% decline in sales compared to the last 12 months. Losses are forecast to narrow 2.5% to US$2.49 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$18m and losses of US$2.59 per share in 2025. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

View our latest analysis for Editas Medicine

Yet despite these upgrades, the analysts cut their price target 22% to US$9.07, implicitly signalling that the ongoing losses are likely to weigh negatively on Editas Medicine's valuation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with a forecast 57% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 4.2% 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 21% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Editas Medicine is expected to lag the wider industry.

The Bottom Line

The most important thing here is that analysts reduced their loss per share estimates for next year, reflecting increased optimism around Editas Medicine's prospects. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Editas Medicine.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Editas Medicine analysts - going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.