Stock Analysis

The Exscientia plc (NASDAQ:EXAI) Analysts Have Been Trimming Their Sales Forecasts

  •  Updated
NasdaqGS:EXAI
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Today is shaping up negative for Exscientia plc (NASDAQ:EXAI) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After the downgrade, the three analysts covering Exscientia are now predicting revenues of UK£43m in 2022. If met, this would reflect a major 20% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing UK£75m of revenue in 2022. The consensus view seems to have become more pessimistic on Exscientia, noting the sizeable cut to revenue estimates in this update.

See our latest analysis for Exscientia

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NasdaqGS:EXAI Earnings and Revenue Growth August 31st 2022

There was no particular change to the consensus price target of UK£19.35, with Exscientia's latest outlook seemingly not enough to result in a change of valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Exscientia at UK£39.25 per share, while the most bearish prices it at UK£16.03. 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.

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 Exscientia's revenue growth is expected to slow, with the forecast 44% annualised growth rate until the end of 2022 being well below the historical 242% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 16% annually. So it's pretty clear that, while Exscientia's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also forecasting more rapid revenue growth than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Exscientia after today.

Unsatisfied? At least one of Exscientia's three analysts has provided estimates out to 2024, which can be seen for 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 that insiders are buying.

What are the risks and opportunities for Exscientia?

Exscientia plc, an artificial intelligence-driven pharmatech company, engages in discovering, designing, and developing drugs.

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Rewards

  • Revenue is forecast to grow 8.37% per year

Risks

  • Earnings are forecast to decline by an average of 57.9% per year for the next 3 years

  • Shareholders have been diluted in the past year

  • Volatile share price over the past 3 months

  • Currently unprofitable and not forecast to become profitable over the next 3 years

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About NasdaqGS:EXAI

Exscientia

Exscientia plc, an artificial intelligence-driven pharmatech company, engages in discovering, designing, and developing drugs.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation1
Future Growth1
Past Performance0
Financial Health5
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Excellent balance sheet and overvalued.