Wave Life Sciences Ltd. (NASDAQ:WVE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.
After the upgrade, the consensus from Wave Life Sciences' six analysts is for revenues of US$87m in 2024, which would reflect a substantial 23% decline in sales compared to the last year of performance. Losses are supposed to balloon 76% to US$0.88 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$76m and losses of US$1.01 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.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 29% by the end of 2024. This indicates a significant reduction from annual growth of 40% 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 9.3% 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 most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Wave Life Sciences' prospects. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. With a serious upgrade to expectations, it might be time to take another look at Wave Life Sciences.
Analysts are definitely bullish on Wave Life Sciences, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. You can learn more, and discover the 3 other risks we've identified, for free on our platform here.
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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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.