The analysts covering CRISPR Therapeutics AG (NASDAQ:CRSP) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After the downgrade, the consensus from CRISPR Therapeutics' 26 analysts is for revenues of US$82m in 2024, which would reflect a stressful 70% decline in sales compared to the last year of performance. Per-share losses are expected to explode, reaching US$5.54 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$121m and losses of US$5.49 per share in 2024. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to this year's revenue estimates, while at the same time holding losses per share steady.

There was no real change to the consensus price target of US$86.78, suggesting that the revisions to revenue estimates are not expected to have a long-term impact on CRISPR Therapeutics' valuation.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 80% by the end of 2024. This indicates a significant reduction from annual growth of 7.2% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 18% per year. It's pretty clear that CRISPR Therapeutics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on CRISPR Therapeutics after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for CRISPR Therapeutics going out to 2026, and you can see them 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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