Athersys, Inc. (NASDAQ:ATHX) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. It looks to have been a weak result overall, as sales of US$86k were 65% less than the analysts expected. Unsurprisingly, losses were also somewhat larger than was modelled, at US$0.11 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, Athersys’ two analysts currently expect revenues in 2021 to be US$456.0k, approximately in line with the last 12 months. Losses are forecast to balloon 26% to US$0.47 per share. Before this earnings announcement, the analysts had been modelling revenues of US$718.0k and losses of US$0.46 per share in 2021. So there’s been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.
The average price target fell 14% to US$6.00, implicitly signalling that lower earnings per share are a leading indicator for Athersys’ valuation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would also point out that the forecast 0.2% revenue decline is better than the historical trend, which saw revenues shrink 17% annually over the past five years
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.
However, before you get too enthused, we’ve discovered 6 warning signs for Athersys (3 shouldn’t be ignored!) that you should be aware of.
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.