One thing we could say about the analysts on Marrone Bio Innovations, Inc. (NASDAQ:MBII) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the most recent consensus for Marrone Bio Innovations from its five analysts is for revenues of US$44m in 2021 which, if met, would be a meaningful 11% increase on its sales over the past 12 months. Losses are presumed to reduce, shrinking 12% from last year to US$0.09. However, before this estimates update, the consensus had been expecting revenues of US$50m and US$0.074 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.

View our latest analysis for Marrone Bio Innovations

The consensus price target fell 19% to US$2.63, implicitly signalling that lower earnings per share are a leading indicator for Marrone Bio Innovations' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Marrone Bio Innovations analyst has a price target of US$4.00 per share, while the most pessimistic values it at US$1.65. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Marrone Bio Innovations' past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Marrone Bio Innovations'historical trends, as the 22% annualised revenue growth to the end of 2021 is roughly in line with the 24% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.8% annually. So although Marrone Bio Innovations is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line