The latest analyst coverage could presage a bad day for ARS Pharmaceuticals, Inc. (NASDAQ:SPRY), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon. Surprisingly the share price has been buoyant, rising 14% to US$13.15 in the past 7 days. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

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Following the latest downgrade, the current consensus, from the six analysts covering ARS Pharmaceuticals, is for revenues of US$83m in 2025, which would reflect a perceptible 6.8% reduction in ARS Pharmaceuticals' sales over the past 12 months. After this downgrade, the company is anticipated to report a loss of US$1.36 in 2025, a sharp decline from a profit over the last year. However, before this estimates update, the consensus had been expecting revenues of US$125m and US$0.36 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 ARS Pharmaceuticals

There was no major change to the consensus price target of US$29.50, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.

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 6.8% by the end of 2025. This indicates a significant reduction from annual growth of 126% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 20% annually for the foreseeable future. It's pretty clear that ARS Pharmaceuticals' revenues are expected to perform substantially worse 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on ARS Pharmaceuticals after the downgrade.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for ARS Pharmaceuticals going out to 2027, and you can see them free on our platform here.

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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.