Nasdaq-Listed Companies

Kadmon Holdings, Inc. (NASDAQ:KDMN) Analysts Just Trimmed Their Revenue Forecasts By 27%

The analysts covering Kadmon Holdings, Inc. (NASDAQ:KDMN) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the five analysts covering Kadmon Holdings are now predicting revenues of US$19m in 2021. If met, this would reflect a major 58% improvement in sales compared to the last 12 months. Losses are expected to increase slightly, to US$0.61 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$26m and losses of US$0.58 per share in 2021. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

earnings-and-revenue-growthNasdaqGS:KDMN Earnings and Revenue Growth January 23rd 2021

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. For example, we noticed that Kadmon Holdings' rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 58%, well above its historical decline of 48% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 20% per year. Not only are Kadmon Holdings' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at Kadmon Holdings. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Kadmon Holdings after today.

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 Kadmon Holdings 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.

This article by Simply Wall St is general in nature. 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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