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One thing we could say about the analysts on Ocular Therapeutix, Inc. (NASDAQ:OCUL) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
Following the downgrade, the consensus from eleven analysts covering Ocular Therapeutix is for revenues of US$54m in 2025, implying a chunky 9.5% decline in sales compared to the last 12 months. Per-share losses are expected to see a sharp uptick, reaching US$1.44. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$71m and losses of US$1.22 per share in 2025. 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.
Check out our latest analysis for Ocular Therapeutix
The consensus price target was broadly unchanged at US$17.50, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the 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. We would highlight that sales are expected to reverse, with a forecast 12% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 27% 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 8.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Ocular Therapeutix is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Ocular Therapeutix after the downgrade.