Yahoo Finance Shorn Like A Sheep: Analysts Just Shaved Their Silence Therapeutics plc (LON:SLN) Forecasts Dramatically
Market forces rained on the parade of Silence Therapeutics plc (LON:SLN) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
Following the downgrade, the most recent consensus for Silence Therapeutics from its two analysts is for revenues of UK£13m in 2020 which, if met, would be a huge increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 45% to UK£0.14. Yet prior to the latest estimates, the analysts had been forecasting revenues of UK£21m and losses of UK£0.041 per share in 2020. 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.
View our latest analysis for Silence Therapeutics
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. It's clear from the latest estimates that Silence Therapeutics' rate of growth is expected to accelerate meaningfully, with the forecast exponential revenue growth noticeably faster than its historical growth of 5.0% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Silence Therapeutics to grow faster 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 Silence Therapeutics. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better 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 Silence Therapeutics, and their negativity could be grounds for caution.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Silence Therapeutics, including dilutive stock issuance over the past year. For more information, you can click here to discover this and the 3 other flags we've identified.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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