Yahoo Finance Scilex Holding Company (NASDAQ:SCLX) Analysts Just Cut Their EPS Forecasts Substantially
One thing we could say about the analysts on Scilex Holding Company (NASDAQ:SCLX) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. Bidders are definitely seeing a different story, with the stock price of US$1.49 reflecting a 26% rise in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.
After this downgrade, Scilex Holding's three analysts are now forecasting revenues of US$58m in 2024. This would be a sizeable 24% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 47% to US$0.71. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$72m and losses of US$0.47 per share in 2024. 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 expecting losses per share to increase.
Check out our latest analysis for Scilex Holding
There was no major change to the consensus price target of US$5.33, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.
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. It's clear from the latest estimates that Scilex Holding's rate of growth is expected to accelerate meaningfully, with the forecast 34% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 13% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Scilex Holding to grow faster than 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, although our data indicates revenues are expected to perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Scilex Holding.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Scilex Holding analysts - going out to 2026, and you can see them free on our platform here.
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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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