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

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. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from nine analysts covering Sangamo Therapeutics is for revenues of US$182m in 2023, implying a chunky 17% decline in sales compared to the last 12 months. Losses are forecast to hold steady at around US$1.12 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$205m and losses of US$0.85 per share in 2023. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out our latest analysis for Sangamo Therapeutics

The consensus price target fell 9.2% to US$6.70, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

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 30% annualised revenue decline to the end of 2023. That is a notable change from historical 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 15% 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. 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 such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Sangamo Therapeutics.

There might be good reason for analyst bearishness towards Sangamo Therapeutics, like dilutive stock issuance over the past year. For more information, you can click here to discover this and the 3 other risks we've identified.

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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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.