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Earnings Release: Here's Why Analysts Cut Their Xeris Pharmaceuticals, Inc. (NASDAQ:XERS) Price Target To US$11.00

Simply Wall St
·4 min read

Xeris Pharmaceuticals, Inc. (NASDAQ:XERS) just released its third-quarter report and things are looking bullish. Sales crushed expectations at US$9.4m, beating expectations by 111%. Xeris Pharmaceuticals reported a statutory loss of US$0.35 per share, which - although not amazing - was much smaller than the analysts predicted. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Xeris Pharmaceuticals after the latest results.

View our latest analysis for Xeris Pharmaceuticals

earnings-and-revenue-growth
earnings-and-revenue-growth

After the latest results, the five analysts covering Xeris Pharmaceuticals are now predicting revenues of US$59.5m in 2021. If met, this would reflect a sizeable 293% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 43% to US$1.61. Before this earnings announcement, the analysts had been modelling revenues of US$58.1m and losses of US$1.74 per share in 2021. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrades to both revenue and loss per share forecasts for next year.

The consensus price target fell 5.2%, to US$11.00, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Xeris Pharmaceuticals at US$14.00 per share, while the most bearish prices it at US$7.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Xeris Pharmaceuticals' growth to accelerate, with the forecast 293% growth ranking favourably alongside historical growth of 81% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Xeris Pharmaceuticals to grow faster than 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. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Xeris Pharmaceuticals. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Xeris Pharmaceuticals analysts - going out to 2024, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Xeris Pharmaceuticals (1 is a bit concerning!) that you should be aware of.

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@simplywallst.com.

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