Stock Analysis

MeiraGTx Holdings plc (NASDAQ:MGTX) Analysts Are Reducing Their Forecasts For This Year

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One thing we could say about the analysts on MeiraGTx Holdings plc (NASDAQ:MGTX) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the current consensus from MeiraGTx Holdings' four analysts is for revenues of US$21m in 2023 which - if met - would reflect a huge 31% increase on its sales over the past 12 months. Per-share losses are expected to creep up to US$2.92. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$40m and losses of US$2.48 per share in 2023. 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.

Check out our latest analysis for MeiraGTx Holdings

NasdaqGS:MGTX Earnings and Revenue Growth March 16th 2023

The consensus price target fell 20% to US$24.83, implicitly signalling that lower earnings per share are a leading indicator for MeiraGTx Holdings' 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 MeiraGTx Holdings at US$47.00 per share, while the most bearish prices it at US$18.00. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the 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 MeiraGTx Holdings' revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 31% growth on an annualised basis. This is compared to a historical growth rate of 53% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% annually. Even after the forecast slowdown in growth, it seems obvious that MeiraGTx Holdings is also expected to grow faster 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, although our data indicates revenues are expected to perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of MeiraGTx Holdings.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple MeiraGTx Holdings analysts - going out to 2025, and you can see them 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.

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Find out whether MeiraGTx Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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