Analysts Just Made A Captivating Upgrade To Their Codexis, Inc. (NASDAQ:CDXS) Forecasts
Shareholders in Codexis, Inc. (NASDAQ:CDXS) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Codexis has also found favour with investors, with the stock up a notable 20% to US$25.32 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.
Following the upgrade, the most recent consensus for Codexis from its eight analysts is for revenues of US$102m in 2021 which, if met, would be a major 41% increase on its sales over the past 12 months. Losses are forecast to hold steady at around US$0.43. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$90m and losses of US$0.56 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
View our latest analysis for Codexis
Despite these upgrades, the analysts have not made any major changes to their price target of US$29.00, implying that their latest estimates don't have a long term impact on what they think the stock is worth. 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 Codexis analyst has a price target of US$34.00 per share, while the most pessimistic values it at US$25.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Codexis shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Codexis' past performance and to peers in the same industry. It's clear from the latest estimates that Codexis' rate of growth is expected to accelerate meaningfully, with the forecast 98% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 9.9% 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 7.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Codexis to grow faster than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Codexis is moving incrementally towards profitability. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Codexis could be a good candidate for more research.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Codexis going out to 2023, 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 upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
This article by Simply Wall St is general in nature. 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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