Market forces rained on the parade of Alvotech (NASDAQ:ALVO) 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 latest consensus from Alvotech's four analysts is for revenues of US$583m in 2025, which would reflect a modest 3.7% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 191% to US$0.59. Before this latest update, the analysts had been forecasting revenues of US$655m and earnings per share (EPS) of US$0.92 in 2025. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

The consensus price target fell 8.0% to US$16.10, with the weaker earnings outlook clearly leading analyst valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Alvotech's revenue growth is expected to slow, with the forecast 7.5% annualised growth rate until the end of 2025 being well below the historical 79% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 21% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Alvotech.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Alvotech. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Alvotech.

That said, the analysts might have good reason to be negative on Alvotech, given concerns around earnings quality. For more information, you can click here to discover this and the 1 other flag we've identified.

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.

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.