What Does The Future Hold For Morphic Holding, Inc. (NASDAQ:MORF)? These Analysts Have Been Cutting Their Estimates

Market forces rained on the parade of Morphic Holding, Inc. (NASDAQ:MORF) shareholders today, when the analysts downgraded their forecasts for next year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Investors however, have been notably more optimistic about Morphic Holding recently, with the stock price up a remarkable 13% to US$41.15 in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

Following the downgrade, the consensus from eight analysts covering Morphic Holding is for revenues of US$9.1m in 2023, implying a concerning 88% decline in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$3.74 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$12m and losses of US$3.65 per share in 2023. 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 Morphic Holding

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 81% by the end of 2023. This indicates a significant reduction from annual growth of 43% 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 15% per year. It's pretty clear that Morphic Holding's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at Morphic Holding. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Morphic Holding going forwards.

There might be good reason for analyst bearishness towards Morphic Holding, like dilutive stock issuance over the past year. 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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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.