Market forces rained on the parade of Editas Medicine, Inc.( NASDAQ:EDIT ) 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 latest downgrade, the eleven analysts covering Editas Medicine provided consensus estimates of US$14m revenue in 2026, which would reflect a sizeable 63% decline on its sales over the past 12 months. The loss per share is expected to ameliorate slightly, reducing to US$1.01. Yet before this consensus update, the analysts had been forecasting revenues of US$23m and losses of US$1.01 per share in 2026. 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 making no real change to the loss per share numbers.
Check out our latest analysis for Editas Medicine
The consensus price target was broadly unchanged at US$5.78, implying that the business is performing roughly in line with expectations, despite a downwards adjustment to forecast sales this year.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One more thing stood out to us about these estimates, and it's the idea that Editas Medicine's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 74% to the end of 2026. This tops off a historical decline of 1.5% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 22% annually. So while a broad number of companies are forecast to grow, unfortunately Editas Medicine is expected to see its sales affected worse than other companies in the 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. 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 Editas Medicine after today.
That said, the analysts might have good reason to be negative on Editas Medicine, given dilutive stock issuance over the past year. For more information, you can click here to discover this and the 4 other concerns we've identified.
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This article by Simply Wall St is general in nature.
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