ChemoCentryx, Inc. Just Reported Full-Year Earnings And Analysts Are Lifting Their Estimates
There's been a notable change in appetite for ChemoCentryx, Inc. (NASDAQ:CCXI) shares in the week since its full-year report, with the stock down 16% to US$41.54. The results overall were pretty much dead in line with analyst forecasts; revenues were US$36m and statutory losses were US$0.98 per share. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on ChemoCentryx after the latest results.
See our latest analysis for ChemoCentryx
Taking into account the latest results, the latest consensus from ChemoCentryx's six analysts is for revenues of US$41.4m in 2020, which would reflect a decent 15% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 37% (on a statutory basis) to US$1.33. Before this earnings announcement, analysts had been forecasting revenues of US$33.3m and losses of US$1.50 per share in 2020. There has definitely been an improvement in perception after these results, with analysts noticeably increasing both their earnings and revenue estimates.
Despite these upgrades, analysts have not made any major changes to their price target of US$59.50, implying that their latest estimates don't have a long term impact on what they think the stock is worth. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values ChemoCentryx at US$64.00 per share, while the most bearish prices it at US$54.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. Analysts are definitely expecting ChemoCentryx's growth to accelerate, with the forecast 15% growth ranking favourably alongside historical growth of 9.6% per annum over the past three years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 16% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that ChemoCentryx is expected to grow at about the same rate as the wider market.
The Bottom Line
The most important thing to note from these estimates is that the consensus increased its forecast losses next year, suggesting all may not be well at ChemoCentryx. They also upgraded their revenue forecasts, although the latest estimates suggest that ChemoCentryx will grow in line with the overall market. The consensus price target held steady at US$59.50, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that in mind, we wouldn't be too quick to come to a conclusion on ChemoCentryx. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple ChemoCentryx analysts - going out to 2024, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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