IsoPlexis Corporation (NASDAQ:ISO) Analysts Just Trimmed Their Revenue Forecasts By 23%

The latest analyst coverage could presage a bad day for IsoPlexis Corporation (NASDAQ:ISO), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After this downgrade, IsoPlexis' four analysts are now forecasting revenues of US$20m in 2022. This would be a modest 6.0% improvement in sales compared to the last 12 months. Losses are presumed to reduce, shrinking 16% from last year to US$2.18. Yet before this consensus update, the analysts had been forecasting revenues of US$26m and losses of US$1.99 per share in 2022. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Check out our latest analysis for IsoPlexis

The consensus price target fell 29% to US$4.83, implicitly signalling that lower earnings per share are a leading indicator for IsoPlexis' valuation. 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 IsoPlexis analyst has a price target of US$8.00 per share, while the most pessimistic values it at US$4.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that IsoPlexis' revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 58% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.9% per year. So it's pretty clear that, while IsoPlexis' 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 increased their loss per share estimates for this year. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of IsoPlexis' future valuation. 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 IsoPlexis after today.

There might be good reason for analyst bearishness towards IsoPlexis, like a short cash runway. Learn more, and discover the 2 other risks 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 that insiders are buying.

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