Analysts Are More Bearish On Stoke Therapeutics, Inc. (NASDAQ:STOK) Than They Used To Be

Market forces rained on the parade of Stoke Therapeutics, Inc. (NASDAQ:STOK) shareholders today, when the analysts downgraded their 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. Investors however, have been notably more optimistic about Stoke Therapeutics recently, with the stock price up an astounding 31% to US$7.75 in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

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After this downgrade, Stoke Therapeutics' ten analysts are now forecasting revenues of US$84m in 2025. This would be a substantial 129% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 29% to US$1.17 per share. However, before this estimates update, the consensus had been expecting revenues of US$94m and US$0.97 per share in losses. 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.

See our latest analysis for Stoke Therapeutics

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Stoke Therapeutics' past performance and to peers in the same industry. It's clear from the latest estimates that Stoke Therapeutics' rate of growth is expected to accelerate meaningfully, with the forecast 129% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 66% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 19% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Stoke Therapeutics 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. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Stoke Therapeutics, and a few readers might choose to steer clear of the stock.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Stoke Therapeutics going out to 2027, 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 backed by insiders.

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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.