One thing we could say about the analysts on Apellis Pharmaceuticals, Inc. (NASDAQ:APLS) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. The stock price has risen 5.3% to US$47.68 over the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.
Following the downgrade, the consensus from twelve analysts covering Apellis Pharmaceuticals is for revenues of US$42m in 2021, implying a sizeable 83% decline in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$6.58 per share. However, before this estimates update, the consensus had been expecting revenues of US$84m and US$6.42 per share in losses. 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.
There was no major change to the consensus price target of US$65.71, 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. There are some variant perceptions on Apellis Pharmaceuticals, with the most bullish analyst valuing it at US$104 and the most bearish at US$37.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.
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 Apellis Pharmaceuticals. Given the stark change in sentiment, we'd understand if investors became more cautious on Apellis Pharmaceuticals after today.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Apellis Pharmaceuticals analysts - 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.
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.
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