Today is shaping up negative for Silence Therapeutics plc (NASDAQ:SLN) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After the downgrade, the consensus from Silence Therapeutics' six analysts is for revenues of UK£15m in 2025, which would reflect a painful 65% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of UK£25m in 2025. It looks like forecasts have become a fair bit less optimistic on Silence Therapeutics, given the sizeable cut to revenue estimates.

View our latest analysis for Silence Therapeutics

Notably, the analysts have cut their price target 15% to US$39.65, suggesting concerns around Silence Therapeutics' valuation.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 65% by the end of 2025. This indicates a significant reduction from annual growth of 40% 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 20% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Silence Therapeutics is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Silence Therapeutics after today.

Thirsting for more data? At least one of Silence Therapeutics' six analysts has provided estimates out to 2027, which can be seen for free on our platform here.

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.

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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.