Broker Revenue Forecasts For Editas Medicine, Inc. (NASDAQ:EDIT) Are Surging Higher

Celebrations may be in order for Editas Medicine, Inc. (NASDAQ:EDIT) 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. The market may be pricing in some blue sky too, with the share price gaining 31% to US$10.28 in the last 7 days. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the latest upgrade, the current consensus, from the 16 analysts covering Editas Medicine, is for revenues of US$20m in 2023, which would reflect a considerable 14% reduction in Editas Medicine's sales over the past 12 months. Losses are forecast to narrow 7.2% to US$3.01 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$17m and losses of US$3.00 per share in 2023. So there's definitely been a change in sentiment in this update, with the analysts upgrading this year's revenue estimates, while at the same time holding losses per share steady.

See our latest analysis for Editas Medicine

The consensus price target held steady at US$12.71 despite the upgrade to revenue forecasts and ongoing losses. Analysts seem to think the business is otherwise performing roughly in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Editas Medicine analyst has a price target of US$30.00 per share, while the most pessimistic values it at US$7.00. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. 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.

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. We would highlight that sales are expected to reverse, with a forecast 19% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 5.7% 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 18% per year. 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 this year, reflecting increased optimism around Editas Medicine's prospects. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. 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.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential flags with Editas Medicine, including recent substantial insider selling. For more information, you can click through to our platform to learn more about this and the 3 other flags 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 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.