Stock Analysis

Need To Know: Analysts Just Made A Substantial Cut To Their Sangamo Therapeutics, Inc. (NASDAQ:SGMO) Estimates

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One thing we could say about the analysts on Sangamo Therapeutics, Inc. (NASDAQ:SGMO) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from ten analysts covering Sangamo Therapeutics is for revenues of US$100m in 2022, implying a chunky 11% decline in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$1.51 per share. However, before this estimates update, the consensus had been expecting revenues of US$111m and US$1.36 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.

View our latest analysis for Sangamo Therapeutics

NasdaqGS:SGMO Earnings and Revenue Growth May 8th 2022

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sangamo Therapeutics' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 15% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 26% 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 12% annually for the foreseeable future. It's pretty clear that Sangamo Therapeutics' revenues are expected to perform substantially worse than 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. 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 Sangamo Therapeutics, and their negativity could be grounds for caution.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Sangamo Therapeutics going out to 2024, 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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Find out whether Sangamo Therapeutics is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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