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One thing we could say about the analysts on Nektar Therapeutics (NASDAQ:NKTR) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. At US$0.71, shares are up 4.0% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.
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After the downgrade, the consensus from Nektar Therapeutics' eight analysts is for revenues of US$40m in 2025, which would reflect a concerning 54% decline in sales compared to the last year of performance. Losses are supposed to balloon 21% to US$0.87 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$64m and losses of US$0.66 per share in 2025. 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.
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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. One more thing stood out to us about these estimates, and it's the idea that Nektar Therapeutics' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 64% to the end of 2025. This tops off a historical decline of 12% 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 8.3% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Nektar Therapeutics to suffer worse than the wider industry.
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 Nektar Therapeutics. 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 Nektar Therapeutics, and their negativity could be grounds for caution.