The latest analyst coverage could presage a bad day for Aadi Bioscience, Inc. (NASDAQ:AADI), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. At US$4.71, shares are up 4.7% in the past 7 days. It will be interesting to see if this downgrade motivates investors to start selling their holdings.
After this downgrade, Aadi Bioscience's four analysts are now forecasting revenues of US$27m in 2024. This would be a meaningful 17% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$33m in 2024. It looks like forecasts have become a fair bit less optimistic on Aadi Bioscience, given the substantial drop in revenue estimates.
See our latest analysis for Aadi Bioscience
The consensus price target fell 6.4% to US$33.00, with the analysts clearly less optimistic about Aadi Bioscience's valuation following this update.
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 pretty clear that there is an expectation that Aadi Bioscience's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 13% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past three years. Compare this to the 669 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 16% per year. So it's pretty clear that, while Aadi Bioscience's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Aadi Bioscience next year. They're also forecasting for revenues to grow at about the same rate as companies in the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Aadi Bioscience's future valuation. 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 Aadi Bioscience after today.
Hungry for more information? We have estimates for Aadi Bioscience from its four analysts out until 2025, and you can see them free on our platform here.
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