Wave Life Sciences Ltd. (NASDAQ:WVE) Analysts Just Trimmed Their Revenue Forecasts By 13%

One thing we could say about the analysts on Wave Life Sciences Ltd. (NASDAQ:WVE) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. At US$8.63, shares are up 5.5% in the past 7 days. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

After the downgrade, the consensus from Wave Life Sciences' 13 analysts is for revenues of US$49m in 2025, which would reflect a substantial 48% decline in sales compared to the last year of performance. Losses are supposed to balloon 39% to US$1.13 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$56m and losses of US$1.07 per share in 2025. 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.

Check out our latest analysis for Wave Life Sciences

The consensus price target was broadly unchanged at US$20.27, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Wave Life Sciences' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 73% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 39% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Wave Life Sciences 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Wave Life Sciences after today.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Wave Life Sciences' financials, such as dilutive stock issuance over the past year. Learn more, and discover the 2 other flags we've identified, for 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 with high insider ownership.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.