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US$17.13 - That's What Analysts Think Akebia Therapeutics, Inc. (NASDAQ:AKBA) Is Worth After These Results

Simply Wall St
·3 mins read

As you might know, Akebia Therapeutics, Inc. (NASDAQ:AKBA) just kicked off its latest quarterly results with some very strong numbers. The results overall were pretty good, with revenues of US$88m exceeding expectations and statutory losses coming in at justUS$0.47 per share, some 26% below what the analysts had forecast. Following the result, the 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Akebia Therapeutics

NasdaqGM:AKBA Past and Future Earnings May 7th 2020
NasdaqGM:AKBA Past and Future Earnings May 7th 2020

Following the recent earnings report, the consensus from eight analysts covering Akebia Therapeutics is for revenues of US$322.7m in 2020, implying an uncomfortable 8.0% decline in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 33% to US$1.48. Before this latest report, the consensus had been expecting revenues of US$316.8m and US$1.69 per share in losses. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading revenues and making a losses per share in particular.

These new estimates led to the consensus price target rising 20% to US$17.13, with lower forecast losses suggesting things could be looking up for Akebia Therapeutics. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Akebia Therapeutics at US$26.00 per share, while the most bearish prices it at US$11.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with the forecast 8.0% revenue decline a notable change from historical growth of 48% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 19% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Akebia Therapeutics is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 Akebia Therapeutics analysts - going out to 2024, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 4 warning signs for Akebia Therapeutics (2 shouldn't be ignored!) that you need to be mindful of.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.