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Today is shaping up negative for Eiger BioPharmaceuticals, Inc. (NASDAQ:EIGR) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.
Following the downgrade, the latest consensus from Eiger BioPharmaceuticals' three analysts is for revenues of US$16m in 2023, which would reflect a substantial 22% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 28% to US$1.57. Yet before this consensus update, the analysts had been forecasting revenues of US$20m and losses of US$1.07 per share in 2023. 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.
Check out our latest analysis for Eiger BioPharmaceuticals
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Eiger BioPharmaceuticals' revenue growth is expected to slow, with the forecast 22% annualised growth rate until the end of 2023 being well below the historical 79% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 13% per year. So it's pretty clear that, while Eiger BioPharmaceuticals' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Eiger BioPharmaceuticals. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Eiger BioPharmaceuticals, and we wouldn't blame shareholders for feeling a little more cautious themselves.
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 Eiger BioPharmaceuticals going out to 2025, 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.