Editas Medicine, Inc. (NASDAQ:EDIT) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

As you might know, Editas Medicine, Inc. (NASDAQ:EDIT) last week released its latest second-quarter, and things did not turn out so great for shareholders. It was not a great result overall, as revenues of US$513k fell 88% short of analyst expectations. Unsurprisingly, statutory losses ended up being19% larger than the analysts expected, at US$0.82 per share. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Editas Medicine

Following the recent earnings report, the consensus from 17 analysts covering Editas Medicine is for revenues of US$24.9m in 2024. This implies a stressful 63% decline in revenue compared to the last 12 months. Per-share losses are expected to explode, reaching US$2.92 per share. Before this latest report, the consensus had been expecting revenues of US$27.6m and US$2.69 per share in losses. Overall it looks as though the analysts are negative in this update. Although revenue forecasts held steady, the consensus also made a pronounced increase to to its losses per share forecasts.

The consensus price target fell 5.1% to US$13.53, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Editas Medicine at US$27.00 per share, while the most bearish prices it at US$7.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 86% by the end of 2024. This indicates a significant reduction from annual growth of 4.5% 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 23% per year. 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. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Editas Medicine's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Editas Medicine going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for Editas Medicine you should know about.

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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.