Yahoo Finance Xenon Pharmaceuticals Inc. (NASDAQ:XENE) Analysts Just Trimmed Their Revenue Forecasts By 10%
Market forces rained on the parade of Xenon Pharmaceuticals Inc. (NASDAQ:XENE) shareholders today, when the analysts downgraded their forecasts for next year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
After the downgrade, the consensus from Xenon Pharmaceuticals' twelve analysts is for revenues of US$10m in 2023, which would reflect a painful 22% decline in sales compared to the last year of performance. Losses are supposed to balloon 61% to US$2.93 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$11m and losses of US$2.88 per share in 2023. 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 making no real change to the loss per share numbers.
See our latest analysis for Xenon Pharmaceuticals
The consensus price target was broadly unchanged at US$49.85, implying that the business is performing roughly in line with expectations, despite a downwards adjustment to forecast sales next year. 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. There are some variant perceptions on Xenon Pharmaceuticals, with the most bullish analyst valuing it at US$60.00 and the most bearish at US$44.00 per share. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Xenon Pharmaceuticals' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 18% by the end of 2023. This indicates a significant reduction from annual growth of 47% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 14% annually for the foreseeable future. It's pretty clear that Xenon Pharmaceuticals' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Xenon Pharmaceuticals after today.
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 Xenon Pharmaceuticals analysts - going out to 2024, and you can see them 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 that insiders are buying.
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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.
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