Newsflash: Roivant Sciences Ltd. (NASDAQ:ROIV) Analysts Have Been Trimming Their Revenue Forecasts

The latest analyst coverage could presage a bad day for Roivant Sciences Ltd. (NASDAQ:ROIV), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. Shares are up 4.7% to US$3.33 in the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

Following the latest downgrade, the eight analysts covering Roivant Sciences provided consensus estimates of US$31m revenue in 2023, which would reflect a painful 40% decline on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$35m of revenue in 2023. The consensus view seems to have become more pessimistic on Roivant Sciences, noting the substantial drop in revenue estimates in this update.

Check out our latest analysis for Roivant Sciences

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 49% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 73% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 16% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Roivant Sciences is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Roivant Sciences going forwards.

Want more information? We have estimates for Roivant Sciences from its eight analysts out until 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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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.