Shareholders of Sight Sciences, Inc. (NASDAQ:SGHT) will be pleased this week, given that the stock price is up 13% to US$5.96 following its latest first-quarter results. Revenue of US$19m came in 4.8% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$0.33, a 14% miss. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sight Sciences after the latest results.

Taking into account the latest results, the current consensus from Sight Sciences' six analysts is for revenues of US$83.6m in 2024. This would reflect a satisfactory 2.6% increase on its revenue over the past 12 months. The loss per share is expected to ameliorate slightly, reducing to US$1.02. Before this latest report, the consensus had been expecting revenues of US$82.5m and US$1.00 per share in losses.

The average price target fell 8.4% to US$6.10, with the ongoing losses seemingly a concern for the analysts, despite the lack of real change to the earnings forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Sight Sciences, with the most bullish analyst valuing it at US$7.00 and the most bearish at US$5.40 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Sight Sciences is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Sight Sciences' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.4% growth on an annualised basis. This is compared to a historical growth rate of 29% over the past three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.1% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Sight Sciences.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Sight Sciences' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Sight Sciences analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for Sight Sciences you should know about.

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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.