Editas Medicine, Inc. (NASDAQ:EDIT) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

Editas Medicine, Inc. (NASDAQ:EDIT) just released its latest quarterly report and things are not looking great. Statutory earnings fell substantially short of expectations, with revenues of US$1.1m missing forecasts by 84%. Losses exploded, with a per-share loss of US$0.76 some 31% below prior forecasts. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Editas Medicine after the latest results.

Check out our latest analysis for Editas Medicine

Following the recent earnings report, the consensus from 16 analysts covering Editas Medicine is for revenues of US$28.8m in 2024. This implies a sizeable 59% decline in revenue compared to the last 12 months. Per-share losses are expected to explode, reaching US$2.63 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$34.3m and losses of US$2.45 per share in 2024. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

There was no major change to the consensus price target of US$15.13, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Editas Medicine at US$27.00 per share, while the most bearish prices it at US$7.00. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Editas Medicine's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 69% by the end of 2024. This indicates a significant reduction from annual growth of 3.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 18% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Editas Medicine is expected to lag the wider industry.

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 they will perform worse than the wider industry. The consensus price target held steady at US$15.13, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Editas Medicine. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Editas Medicine analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Editas Medicine has 4 warning signs we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.