The latest analyst coverage could presage a bad day for Acorda Therapeutics, Inc. (NASDAQ:ACOR), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
Following the downgrade, the consensus from four analysts covering Acorda Therapeutics is for revenues of US$91m in 2021, implying a disturbing 45% decline in sales compared to the last 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of US$1.95 per share in 2021. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$102m and losses of US$1.51 per share in 2021. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Acorda Therapeutics’ past performance and to peers in the same industry. Over the past five years, revenues have declined around 17% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for a 45% decline in revenue next year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 20% per year. So it’s pretty clear that, while it does have declining revenues, the analysts also expect Acorda Therapeutics to suffer worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We wouldn’t be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Acorda Therapeutics, and their negativity could be grounds for caution.
Still, the long-term prospects of the business are much more relevant than next year’s earnings. At Simply Wall St, we have a full range of analyst estimates for Acorda Therapeutics going out to 2024, 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.
This article by Simply Wall St is general in nature. 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.