Analysts' Revenue Estimates For Editas Medicine, Inc. (NASDAQ:EDIT) Are Surging Higher

Editas Medicine, Inc. (NASDAQ:EDIT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that Editas Medicine will make substantially more sales than they'd previously expected.

Following the upgrade, the current consensus from Editas Medicine's twelve analysts is for revenues of US$27m in 2022 which - if met - would reflect a meaningful 12% increase on its sales over the past 12 months. Losses are forecast to hold steady at around US$3.22. However, before this estimates update, the consensus had been expecting revenues of US$23m and US$3.38 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 Editas Medicine

The consensus price target fell 10%, to US$40.46, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue 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. The most optimistic Editas Medicine analyst has a price target of US$80.00 per share, while the most pessimistic values it at US$16.00. 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 think this business will perform. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

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 Editas Medicine's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2022 being well below the historical 44% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 13% annually. Factoring in the forecast slowdown in growth, it looks like Editas Medicine is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Editas Medicine is moving incrementally towards profitability. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Editas Medicine's future valuation. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Editas Medicine.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Editas Medicine going out to 2024, and you can see them 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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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.