Analysts Just Slashed Their Ocular Therapeutix, Inc. (NASDAQ:OCUL) EPS Numbers

The analysts covering Ocular Therapeutix, Inc. (NASDAQ:OCUL) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the five analysts covering Ocular Therapeutix are now predicting revenues of US$59m in 2023. If met, this would reflect a decent 14% improvement in sales compared to the last 12 months. Losses are expected to increase substantially, hitting US$1.02 per share. However, before this estimates update, the consensus had been expecting revenues of US$70m and US$0.85 per share in losses. 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 Ocular Therapeutix

There was no major change to the consensus price target of US$11.86, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Ocular Therapeutix at US$15.00 per share, while the most bearish prices it at US$7.00. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Ocular Therapeutix's revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2023 being well below the historical 62% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.8% annually. Even after the forecast slowdown in growth, it seems obvious that Ocular Therapeutix 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. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Ocular Therapeutix.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Ocular Therapeutix 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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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.