Newsflash: VYNE Therapeutics Inc. (NASDAQ:VYNE) Analysts Have Been Trimming Their Revenue Forecasts

The analysts covering VYNE Therapeutics Inc. (NASDAQ:VYNE) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the latest consensus from VYNE Therapeutics' five analysts is for revenues of US$52m in 2021, which would reflect a huge 210% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$59m of revenue in 2021. It looks like forecasts have become a fair bit less optimistic on VYNE Therapeutics, given the measurable cut to revenue estimates.

Check out our latest analysis for VYNE Therapeutics

Notably, the analysts have cut their price target 7.2% to US$22.00, suggesting concerns around VYNE Therapeutics' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values VYNE Therapeutics at US$40.00 per share, while the most bearish prices it at US$12.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting VYNE Therapeutics' growth to accelerate, with the forecast 210% growth ranking favourably alongside historical growth of 23% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.9% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect VYNE Therapeutics 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. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of VYNE Therapeutics' future valuation. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of VYNE Therapeutics going forwards.

Need some more information? At least one of VYNE Therapeutics' five analysts has provided estimates out to 2025, 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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