Stock Analysis

These Analysts Just Made A Massive Downgrade To Their Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) EPS Forecasts

  •  Updated
NasdaqGS:YMAB
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The analysts covering Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the current consensus from Y-mAbs Therapeutics' seven analysts is for revenues of US$61m in 2021 which - if met - would reflect a sizeable 196% increase on its sales over the past 12 months. Losses are expected to be contained, narrowing 16% from last year to US$2.49. However, before this estimates update, the consensus had been expecting revenues of US$85m and US$1.50 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.

See our latest analysis for Y-mAbs Therapeutics

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NasdaqGS:YMAB Earnings and Revenue Growth March 1st 2021

The consensus price target was broadly unchanged at US$58.63, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Y-mAbs Therapeutics, with the most bullish analyst valuing it at US$67.00 and the most bearish at US$45.00 per share. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. 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 Y-mAbs Therapeutics after the downgrade.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Y-mAbs Therapeutics' business, like recent substantial insider selling. Learn more, and discover the 4 other risks we've identified, for free on our platform here.

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