What You Need To Know About The Assembly Biosciences, Inc. (NASDAQ:ASMB) Analyst Downgrade Today

The analysts covering Assembly Biosciences, Inc. (NASDAQ:ASMB) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. The stock price has risen 5.7% to US$22.07 over the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following the downgrade, the consensus from four analysts covering Assembly Biosciences is for revenues of US$10m in 2020, implying a sizeable 37% decline in sales compared to the last 12 months. Losses are expected to be contained, narrowing 12% from last year to US$2.98. Yet before this consensus update, the analysts had been forecasting revenues of US$15m and losses of US$3.27 per share in 2020. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

View our latest analysis for Assembly Biosciences

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with the forecast 37% revenue decline a notable change from historical growth of 42% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 25% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Assembly Biosciences is expected to lag the wider industry.

The Bottom Line

Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Assembly Biosciences' revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Assembly Biosciences going forwards.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Assembly Biosciences, including dilutive stock issuance over the past year. For more information, you can click here to discover this and the 3 other warning signs we've identified.

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.

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