The analysts covering IDEAYA Biosciences, Inc. (NASDAQ:IDYA) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the current consensus, from the ten analysts covering IDEAYA Biosciences, is for revenues of US$14m in 2024, which would reflect a chunky 11% reduction in IDEAYA Biosciences' sales over the past 12 months. Per-share losses are expected to explode, reaching US$2.33 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$19m and losses of US$2.21 per share in 2024. 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.

There was no major change to the consensus price target of US$53.00, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 14% by the end of 2024. This indicates a significant reduction from annual growth of 37% 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 18% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - IDEAYA Biosciences is expected to lag 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 IDEAYA Biosciences. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that IDEAYA Biosciences' revenues are expected to grow slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on IDEAYA Biosciences after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple IDEAYA Biosciences analysts - 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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