Downgrade: Here's How Analysts See 2seventy bio, Inc. (NASDAQ:TSVT) Performing In The Near Term

One thing we could say about the analysts on 2seventy bio, Inc. (NASDAQ:TSVT) - 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 the analysts seeing grey clouds on the horizon.

After the downgrade, the consensus from 2seventy bio's seven analysts is for revenues of US$56m in 2024, which would reflect a concerning 22% decline in sales compared to the last year of performance. The loss per share is anticipated to greatly reduce in the near future, narrowing 30% to US$3.05. Yet before this consensus update, the analysts had been forecasting revenues of US$89m and losses of US$2.03 per share in 2024. 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.

See our latest analysis for 2seventy bio

There was no major change to the consensus price target of US$10.83, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 28% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 16% 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 19% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - 2seventy bio is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that 2seventy bio's revenues are expected to grow slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on 2seventy bio after the downgrade.

There might be good reason for analyst bearishness towards 2seventy bio, like dilutive stock issuance over the past year. For more information, you can click here to discover this and the 2 other concerns 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.