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

Market forces rained on the parade of VYNE Therapeutics Inc. (NASDAQ:VYNE) shareholders today, when the analysts downgraded their forecasts for this year. 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 consensus from five analysts covering VYNE Therapeutics is for revenues of US$18m in 2021, implying a substantial 22% decline in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 76% to US$1.36. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$34m and losses of US$1.37 per share in 2021. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to this year's revenue estimates, while at the same time holding losses per share steady.

See our latest analysis for VYNE Therapeutics

The consensus price target fell 21% to US$9.00, with the analysts clearly concerned about the weaker revenue outlook and expectation of ongoing losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on VYNE Therapeutics, with the most bullish analyst valuing it at US$15.00 and the most bearish at US$8.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the VYNE Therapeutics' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 38% by the end of 2021. This indicates a significant reduction from annual growth of 41% 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 3.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - VYNE Therapeutics is expected to lag the wider industry.

The Bottom Line

Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on VYNE Therapeutics after today.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple VYNE Therapeutics analysts - going out to 2023, 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.
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