Market forces rained on the parade of BioLife Solutions, Inc. (NASDAQ:BLFS) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
Following the downgrade, the consensus from eight analysts covering BioLife Solutions is for revenues of US$153m in 2023, implying a discernible 5.5% decline in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 33% to US$1.29. However, before this estimates update, the consensus had been expecting revenues of US$186m and US$0.81 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.
The consensus price target fell 17% to US$25.14, implicitly signalling that lower earnings per share are a leading indicator for BioLife Solutions' 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. We would highlight that sales are expected to reverse, with a forecast 11% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 47% 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 6.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - BioLife Solutions 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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that BioLife Solutions' revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of BioLife Solutions.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple BioLife Solutions analysts - going out to 2025, 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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