Things Look Grim For Precigen, Inc. (NASDAQ:PGEN) After Today's Downgrade

One thing we could say about the analysts on Precigen, Inc. (NASDAQ:PGEN) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. 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.

Following the latest downgrade, the four analysts covering Precigen provided consensus estimates of US$8.8m revenue in 2023, which would reflect a concerning 62% decline on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$0.42 per share. However, before this estimates update, the consensus had been expecting revenues of US$12m and US$0.38 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.

See our latest analysis for Precigen

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Over the past five years, revenues have declined around 30% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 73% decline in revenue until the end of 2023. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 19% per year. So while a broad number of companies are forecast to grow, unfortunately Precigen is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Precigen. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Precigen, and their negativity could be grounds for caution.

There might be good reason for analyst bearishness towards Precigen, like a short cash runway. Learn more, and discover the 3 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.