Yahoo Finance Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) Analysts Are Pretty Bullish On The Stock After Recent Results
The analysts might have been a bit too bullish on Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL), given that the company fell short of expectations when it released its quarterly results last week. It was a pretty negative result overall, with revenues of US$30m missing analyst predictions by 6.2%. Worse, the business reported a statutory loss of US$0.05 per share, much larger than the analysts had forecast prior to the result. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for Rigel Pharmaceuticals
Taking into account the latest results, the most recent consensus for Rigel Pharmaceuticals from six analysts is for revenues of US$149.7m in 2024. If met, it would imply a sizeable 26% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 52% to US$0.055. Before this latest report, the consensus had been expecting revenues of US$149.5m and US$0.088 per share in losses. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a very favorable reduction to losses per share in particular.
These new estimates led to the consensus price target rising 13% to US$5.15, with lower forecast losses suggesting things could be looking up for Rigel Pharmaceuticals. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Rigel Pharmaceuticals analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$1.75. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Rigel Pharmaceuticals' rate of growth is expected to accelerate meaningfully, with the forecast 35% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 9.0% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Rigel Pharmaceuticals to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Rigel Pharmaceuticals analysts - going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Rigel Pharmaceuticals that we have uncovered.
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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.
