These Analysts Think EyePoint Pharmaceuticals, Inc.'s (NASDAQ:EYPT) Sales Are Under Threat

One thing we could say about the analysts on EyePoint Pharmaceuticals, Inc. (NASDAQ:EYPT) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the consensus from eleven analysts covering EyePoint Pharmaceuticals is for revenues of US$42m in 2024, implying an uneasy 17% decline in sales compared to the last 12 months. Losses are supposed to balloon 44% to US$2.33 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$46m and losses of US$2.21 per share in 2024. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for EyePoint Pharmaceuticals

There was no major change to the consensus price target of US$38.80, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.

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 sales are expected to slow, with a forecast annualised revenue decline of 32% by the end of 2024. This indicates a significant reduction from annual growth of 18% 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 10% annually for the foreseeable future. It's pretty clear that EyePoint Pharmaceuticals' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that EyePoint Pharmaceuticals' revenues are expected to grow slower 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 EyePoint Pharmaceuticals after today.

That said, the analysts might have good reason to be negative on EyePoint Pharmaceuticals, given major dilution from new stock issuance in the past year. Learn more, and discover the 1 other concern we've identified, for 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 downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.