Wave Life Sciences Ltd. (NASDAQ:WVE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year’s forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.
Following the latest upgrade, the current consensus, from the seven analysts covering Wave Life Sciences, is for revenues of US$68m in 2024, which would reflect a sizeable 21% reduction in Wave Life Sciences’ sales over the past 12 months. Per-share losses are expected to see a sharp uptick, reaching US$0.95. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$55m and losses of US$1.04 per share in 2024. So there’s been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 17% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 24% 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 8.3% annually for the foreseeable future. It’s pretty clear that Wave Life Sciences’ revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses next year, perhaps suggesting Wave Life Sciences is moving incrementally towards profitability. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. The clear improvement in sentiment should be enough to get most shareholders feeling more optimistic about Wave Life Sciences’ future.
Analysts are clearly in love with Wave Life Sciences at the moment, but before diving in – you should be aware that we’ve identified some warning flags with the business, such as dilutive stock issuance over the past year. You can learn more, and discover the 2 other concerns 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 upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.