The analysts covering IDEAYA Biosciences, Inc. (NASDAQ:IDYA) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. 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.

After the downgrade, the consensus from IDEAYA Biosciences' 13 analysts is for revenues of US$8.4m in 2024, which would reflect a concerning 30% decline in sales compared to the last year of performance. Losses are supposed to balloon 40% to US$2.54 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$12m and losses of US$2.17 per share in 2024. 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.

See our latest analysis for IDEAYA Biosciences

The consensus price target was broadly unchanged at US$57.00, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 51% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 28% 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 23% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - IDEAYA Biosciences 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 IDEAYA Biosciences' revenues are expected to grow slower 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 IDEAYA Biosciences.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for IDEAYA Biosciences going out to 2026, 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.

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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.