Analysts Have Lowered Expectations For Editas Medicine, Inc. (NASDAQ:EDIT) After Its Latest Results

As you might know, Editas Medicine, Inc. (NASDAQ:EDIT) last week released its latest quarterly, and things did not turn out so great for shareholders. Statutory earnings fell substantially short of expectations, with revenues of US$1.1m missing forecasts by 84%. Losses exploded, with a per-share loss of US$0.76 some 31% below prior forecasts. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Editas Medicine

Taking into account the latest results, the 16 analysts covering Editas Medicine provided consensus estimates of US$28.8m revenue in 2024, which would reflect a disturbing 59% decline over the past 12 months. Per-share losses are expected to explode, reaching US$2.63 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$34.3m and losses of US$2.45 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.

There was no major change to the consensus price target of US$15.13, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Editas Medicine at US$27.00 per share, while the most bearish prices it at US$7.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Editas Medicine's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 69% by the end of 2024. This indicates a significant reduction from annual growth of 3.1% 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 18% annually for the foreseeable future. It's pretty clear that Editas Medicine's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Editas Medicine. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that 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.

You still need to take note of risks, for example - Editas Medicine has 4 warning signs we think you should be aware of.

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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.