Analysts Are More Bearish On Sangamo Therapeutics, Inc. (NASDAQ:SGMO) Than They Used To Be

The latest analyst coverage could presage a bad day for Sangamo Therapeutics, Inc. (NASDAQ:SGMO), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. 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 nine analysts covering Sangamo Therapeutics provided consensus estimates of US$205m revenue in 2023, which would reflect a chunky 15% decline on its sales over the past 12 months. Per-share losses are expected to see a sharp uptick, reaching US$0.85. Yet before this consensus update, the analysts had been forecasting revenues of US$233m and losses of US$0.56 per share in 2023. 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 Sangamo Therapeutics

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 19% by the end of 2023. This indicates a significant reduction from annual growth of 18% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 20% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Sangamo Therapeutics is expected to lag the wider 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 Sangamo Therapeutics. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Sangamo Therapeutics' revenues are expected to grow slower than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Sangamo Therapeutics, and a few readers might choose to steer clear of the stock.

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