Some Analysts Just Cut Their Molecular Templates, Inc. (NASDAQ:MTEM) Estimates

One thing we could say about the analysts on Molecular Templates, Inc. (NASDAQ:MTEM) - 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 analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the seven analysts covering Molecular Templates are now predicting revenues of US$30m in 2022. If met, this would reflect a substantial 22% improvement in sales compared to the last 12 months. Per-share losses are expected to creep up to US$1.87. However, before this estimates update, the consensus had been expecting revenues of US$39m and US$1.73 per share in losses. 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 Molecular Templates

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 Molecular Templates' revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 17% growth on an annualised basis. This is compared to a historical growth rate of 40% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 16% annually. Factoring in the forecast slowdown in growth, it looks like Molecular Templates is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for next year. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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 Molecular Templates after today.

That said, the analysts might have good reason to be negative on Molecular Templates, given dilutive stock issuance over the past year. Learn more, and discover the 3 other risks we've identified, for 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.

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.

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