These Analysts Think Sol-Gel Technologies Ltd.'s (NASDAQ:SLGL) Sales Are Under Threat

One thing we could say about the analysts on Sol-Gel Technologies Ltd. (NASDAQ:SLGL) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the current consensus from Sol-Gel Technologies' four analysts is for revenues of US$26m in 2021 which - if met - would reflect a huge 144% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$32m in 2021. The consensus view seems to have become more pessimistic on Sol-Gel Technologies, noting the substantial drop in revenue estimates in this update.

Check out our latest analysis for Sol-Gel Technologies

We'd point out that there was no major changes to their price target of US$20.00, suggesting the latest estimates were not enough to shift their view on the value of the business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Sol-Gel Technologies analyst has a price target of US$23.00 per share, while the most pessimistic values it at US$16.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Sol-Gel Technologies shareholders.

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. The analysts are definitely expecting Sol-Gel Technologies' growth to accelerate, with the forecast 144% growth ranking favourably alongside historical growth of 86% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.6% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Sol-Gel Technologies to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for next year. They're also forecasting more rapid revenue growth than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Sol-Gel Technologies going forwards.

Unanswered questions? At least one of Sol-Gel Technologies' four analysts has provided estimates out to 2024, which can be seen for 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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