Exelixis, Inc. (NASDAQ:EXEL) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Results showed a clear earnings miss, with US$425m revenue coming in 7.7% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$0.12 missed the mark badly, arriving some 50% below what was expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from Exelixis' 21 analysts is for revenues of US$1.89b in 2024. This reflects a satisfactory 2.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 64% to US$1.16. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.91b and earnings per share (EPS) of US$1.25 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$26.54, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Exelixis at US$32.35 per share, while the most bearish prices it at US$17.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Exelixis' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.1% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 18% annually. Factoring in the forecast slowdown in growth, it seems obvious that Exelixis is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Exelixis' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$26.54, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Exelixis going out to 2026, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Exelixis that you should be aware of.
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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.