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As you might know, Xencor, Inc. (NASDAQ:XNCR) last week released its latest third-quarter, and things did not turn out so great for shareholders. Revenues missed expectations somewhat, coming in at US$35m, but statutory earnings fell catastrophically short, with a loss of US$0.22 some 120% larger than what the analysts had predicted. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Xencor's eleven analysts is for revenues of US$105.8m in 2021, which would reflect a substantial 25% improvement in sales compared to the last 12 months. Losses are forecast to balloon 34% to US$1.95 per share. Before this latest report, the consensus had been expecting revenues of US$103.7m and US$1.99 per share in losses. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for both revenues and losses per share.
The consensus price target rose 5.4% to US$47.91, with the analysts encouraged by the higher revenue and lower forecast losses for next year. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Xencor analyst has a price target of US$60.00 per share, while the most pessimistic values it at US$28.00. 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. It's clear from the latest estimates that Xencor's rate of growth is expected to accelerate meaningfully, with the forecast 25% revenue growth noticeably faster than its historical growth of 20%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 21% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Xencor is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Xencor will grow in line with the overall 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 forecasts for Xencor going out to 2024, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Xencor you should know about.
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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