The first-quarter results for Editas Medicine, Inc. (NASDAQ:EDIT) were released last week, making it a good time to revisit its performance. Statutory results overall were mixed, with revenues coming in 52% lower than the analysts predicted. What's really surprising is that losses of US$0.26 per share were pretty much in line with forecasts, despite the revenue miss. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Taking into account the latest results, the current consensus, from the six analysts covering Editas Medicine, is for revenues of US$37.8m in 2026. This implies a perceptible 2.3% reduction in Editas Medicine's revenue over the past 12 months. Losses are forecast to narrow 4.1% to US$1.07 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$24.7m and losses of US$1.02 per share in 2026. Ergo, there's been a clear change in sentiment, with the analysts lifting this year's revenue estimates, while at the same time increasing their loss per share numbers to reflect the cost of achieving this growth.

It will come as a surprise to learn that the consensus price target rose 11% to US$6.38, with the analysts clearly more interested in growing revenue, even as losses intensify. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Editas Medicine at US$15.00 per share, while the most bearish prices it at US$4.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Over the past five years, revenues have declined around 1.5% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 3.0% decline in revenue until the end of 2026. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 21% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Editas Medicine to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Editas Medicine. Long-term earnings power is much more important than next year's profits. We have forecasts for Editas Medicine going out to 2028, and you can see them free on our platform here.

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.