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The analysts covering Microba Life Sciences Limited (ASX:MAP) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
We've discovered 3 warning signs about Microba Life Sciences. View them for free.
After the downgrade, the consensus from Microba Life Sciences' dual analysts is for revenues of AU$15m in 2025, which would reflect a considerable 9.5% decline in sales compared to the last year of performance. The loss per share is expected to ameliorate slightly, reducing to AU$0.029. However, before this estimates update, the consensus had been expecting revenues of AU$18m and AU$0.029 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also making no real change to the loss per share numbers.
View our latest analysis for Microba Life Sciences
the analysts have cut their price target 17% to AU$0.29 per share, signalling that the declining revenue and ongoing losses are contributing to the lower valuation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 18% by the end of 2025. This indicates a significant reduction from annual growth of 51% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.6% per year. It's pretty clear that Microba Life Sciences' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Microba Life Sciences' revenues are expected to grow slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Microba Life Sciences going forwards.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.