The latest analyst coverage could presage a bad day for AbCellera Biologics Inc. (NASDAQ:ABCL), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the nine analysts covering AbCellera Biologics are now predicting revenues of US$34m in 2024. If met, this would reflect an okay 3.1% improvement in sales compared to the last 12 months. Per-share losses are expected to see a sharp uptick, reaching US$0.57. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$42m and losses of US$0.57 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.

See our latest analysis for AbCellera Biologics

the analysts have cut their price target 7.0% to US$13.38 per share, signalling that the declining revenue and ongoing losses are contributing to the lower valuation.

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. One thing stands out from these estimates, which is that AbCellera Biologics is forecast to grow faster in the future than it has in the past, with revenues expected to display 6.3% annualised growth until the end of 2024. If achieved, this would be a much better result than the 62% annual decline over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.7% annually. So while AbCellera Biologics' revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. 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 AbCellera Biologics going forwards.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple AbCellera Biologics 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 backed by insiders.

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