These Analysts Just Made An Incredible Downgrade To Their Compugen Ltd. (NASDAQ:CGEN) EPS Forecasts
One thing we could say about the analysts on Compugen Ltd. (NASDAQ:CGEN) - 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. Shares are up 4.3% to US$1.45 in the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.
Our free stock report includes 2 warning signs investors should be aware of before investing in Compugen. Read for free now.
Following the downgrade, the consensus from four analysts covering Compugen is for revenues of US$14m in 2025, implying a painful 49% decline in sales compared to the last 12 months. Losses are supposed to balloon 82% to US$0.28 per share. However, before this estimates update, the consensus had been expecting revenues of US$31m and US$0.12 per share in losses. 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.
View our latest analysis for Compugen
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 59% by the end of 2025. This indicates a significant reduction from annual growth of 63% 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 17% annually for the foreseeable future. It's pretty clear that Compugen's revenues are expected to perform substantially worse than the wider industry.
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 Compugen. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Compugen, and their negativity could be grounds for caution.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Compugen going out to 2027, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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