What Does The Future Hold For Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS)? These Analysts Have Been Cutting Their Estimates

Today is shaping up negative for Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After the downgrade, the consensus from Tarsus Pharmaceuticals' five analysts is for revenues of US$6.6m in 2023, which would reflect a substantial 47% decline in sales compared to the last year of performance. Losses are supposed to balloon 70% to US$4.75 per share. However, before this estimates update, the consensus had been expecting revenues of US$7.4m and US$4.59 per share in losses. 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.

View our latest analysis for Tarsus Pharmaceuticals

The consensus price target fell 8.2% to US$46.25, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

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 72% by the end of 2023. This indicates a significant reduction from annual growth of 14% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Tarsus Pharmaceuticals 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 Tarsus Pharmaceuticals. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Tarsus Pharmaceuticals' future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Tarsus Pharmaceuticals after today.

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 Tarsus Pharmaceuticals going out to 2025, and you can see them 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.