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

Today is shaping up negative for Spero Therapeutics, Inc. (NASDAQ:SPRO) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the latest downgrade, the current consensus, from the four analysts covering Spero Therapeutics, is for revenues of US$29m in 2023, which would reflect a painful 46% reduction in Spero Therapeutics' sales over the past 12 months. Losses are supposed to balloon 135% to US$1.20 per share. However, before this estimates update, the consensus had been expecting revenues of US$44m and US$0.87 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.

See our latest analysis for Spero Therapeutics

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 57% by the end of 2023. This indicates a significant reduction from annual growth of 37% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 20% per year. It's pretty clear that Spero 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 Spero Therapeutics. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Spero 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 Spero Therapeutics, and a few readers might choose to steer clear of the stock.

There might be good reason for analyst bearishness towards Spero Therapeutics, like major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 2 other risks we've identified.

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.