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What Does The Future Hold For ChemoCentryx, Inc. (NASDAQ:CCXI)? These Analysts Have Been Cutting Their Estimates

The latest analyst coverage could presage a bad day for ChemoCentryx, Inc. (NASDAQ:CCXI), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the consensus from ChemoCentryx's seven analysts is for revenues of US$52m in 2021, which would reflect a substantial 27% decline in sales compared to the last year of performance. Per-share losses are expected to explode, reaching US$1.43 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$59m and losses of US$1.34 per share in 2021. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for ChemoCentryx

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earnings-and-revenue-growth

There was no major change to the consensus price target of US$79.43, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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 ChemoCentryx at US$100.00 per share, while the most bearish prices it at US$60.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ChemoCentryx's past performance and to peers in the same industry. One more thing stood out to us about these estimates, and it's the idea that ChemoCentryx'sdecline is expected to accelerate, with revenues forecast to fall 27% next year, topping off a historical decline of 10% a year over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 22% per year. So while a broad number of companies are forecast to grow, unfortunately ChemoCentryx is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for next year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that ChemoCentryx's revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of ChemoCentryx going forwards.

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 ChemoCentryx 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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