One thing we could say about the analysts on Mirati Therapeutics, Inc. (NASDAQ:MRTX) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
Following the latest downgrade, the current consensus, from the eleven analysts covering Mirati Therapeutics, is for revenues of US$3.5m in 2021, which would reflect a painful 74% reduction in Mirati Therapeutics' sales over the past 12 months. Losses are expected to increase slightly, to US$8.68 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$5.8m and losses of US$8.67 per share in 2021. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to this year's revenue estimates, while at the same time holding losses per share steady.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One more thing stood out to us about these estimates, and it's the idea that Mirati Therapeutics' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 74% to the end of 2021. This tops off a historical decline of 7.7% a year over the past three years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 18% annually. So while a broad number of companies are forecast to grow, unfortunately Mirati Therapeutics is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
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 this year's forecasts, we'd be feeling a little more wary of Mirati Therapeutics going forwards.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Mirati Therapeutics 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.
When trading Mirati Therapeutics or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.
This article by Simply Wall St is general in nature. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.