Analysts Are More Bearish On Calyxt, Inc. (NASDAQ:CLXT) Than They Used To Be
The latest analyst coverage could presage a bad day for Calyxt, Inc. (NASDAQ:CLXT), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. 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.
After the downgrade, the consensus from Calyxt's four analysts is for revenues of US$23m in 2021, which would reflect an uneasy 10% decline in sales compared to the last year of performance. The loss per share is anticipated to greatly reduce in the near future, narrowing 24% to US$0.96. However, before this estimates update, the consensus had been expecting revenues of US$33m and US$0.73 per share in losses. 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 expecting losses per share to increase.
Check out our latest analysis for Calyxt
The consensus price target fell 28% to US$7.63, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Calyxt analyst has a price target of US$16.00 per share, while the most pessimistic values it at US$7.50. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how think this business will perform. 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.
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 sales are expected to reverse, with a forecast 13% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 111% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 14% per year. It's pretty clear that Calyxt's revenues are expected to perform substantially 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 Calyxt. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Calyxt's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Calyxt.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Calyxt's financials, such as dilutive stock issuance over the past year. Learn more, and discover the 2 other risks we've identified, for 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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