Today is shaping up negative for BridgeBio Pharma, Inc. (NASDAQ:BBIO) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the current consensus, from the 18 analysts covering BridgeBio Pharma, is for revenues of US$190m in 2025, which would reflect a chunky 13% reduction in BridgeBio Pharma's sales over the past 12 months. Losses are supposed to balloon 54% to US$3.57 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$190m and losses of US$3.52 per share in 2025. So it looks like there's been no real change in sentiment in this consensus update, with the analysts reconfirming both their revenue and loss per share numbers.

The consensus price target was unchanged at US$46.89, suggesting that the business - losses and all - is executing in line with estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with a forecast 10% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 38% 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 21% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - BridgeBio Pharma is expected to lag the wider industry.

The Bottom Line

The most important thing here is that analysts reduced their loss per share estimates for next year, reflecting increased optimism around BridgeBio Pharma's prospects. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data indicates that BridgeBio Pharma's 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 next year, we wouldn't be surprised if investors were a bit wary of BridgeBio Pharma.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with BridgeBio Pharma, including a short cash runway. For more information, you can click here to discover this and the 2 other warning signs we've identified.

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