These Analysts Think Kymera Therapeutics, Inc.'s (NASDAQ:KYMR) Sales Are Under Threat
One thing we could say about the analysts on Kymera Therapeutics, Inc. (NASDAQ:KYMR) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
After this downgrade, Kymera Therapeutics' 17 analysts are now forecasting revenues of US$71m in 2023. This would be a huge 54% improvement in sales compared to the last 12 months. Per-share losses are expected to creep up to US$2.94. However, before this estimates update, the consensus had been expecting revenues of US$74m and US$3.06 per share in losses. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for next year.
View our latest analysis for Kymera Therapeutics
There was no major change to the US$55.75 average analyst price target, suggesting that the adjustments to revenue and earnings are not expected to have a long-term impact on the business. 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. Currently, the most bullish analyst values Kymera Therapeutics at US$93.00 per share, while the most bearish prices it at US$26.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Kymera Therapeutics' revenue growth is expected to slow, with the forecast 41% annualised growth rate until the end of 2023 being well below the historical 57% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 15% annually. So it's pretty clear that, while Kymera Therapeutics' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Kymera Therapeutics going forwards.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Kymera Therapeutics analysts - going out to 2024, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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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