Need To Know: Analysts Just Made A Substantial Cut To Their Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS) Estimates

Market forces rained on the parade of Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS) shareholders today, when the analysts downgraded their 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 consensus from Pieris Pharmaceuticals' three analysts is for revenues of US$22m in 2021, which would reflect a concerning 30% decline in sales compared to the last year of performance. Per-share losses are expected to explode, reaching US$0.90 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$30m and losses of US$0.69 per share in 2021. 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 Pieris Pharmaceuticals

The consensus price target fell 17% to US$7.50, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Pieris Pharmaceuticals analyst has a price target of US$9.00 per share, while the most pessimistic values it at US$6.00. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. We would highlight that sales are expected to reverse, with a forecast 38% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 34% 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 14% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Pieris Pharmaceuticals is expected to lag 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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Pieris Pharmaceuticals' revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Pieris Pharmaceuticals analysts - going out to 2025, and you can see them 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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