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As you might know, Ardelyx, Inc. (NASDAQ:ARDX) just kicked off its latest first-quarter results with some very strong numbers. Overall results were decent, with revenues of US$1.2m beating estimates by121%. Statutory losses were subsequently less thanthe analysts had expected, at US$0.25 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ardelyx after the latest results.
See our latest analysis for Ardelyx
After the latest results, the consensus from Ardelyx's four analysts is for revenues of US$4.95m in 2020, which would reflect a disturbing 24% decline in sales compared to the last year of performance. Losses are supposed to decline, shrinking 19% from last year to US$1.04. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$3.37m and losses of US$1.04 per share in 2020. So there's definitely been a change in sentiment in this update, with the analysts upgrading this year's revenue estimates, while at the same time holding losses per share steady.
There were no major changes to the US$13.00 consensus price target despite the higher revenue estimates, with the analysts seeming to believe that ongoing losses have a larger impact on the valuation than growing sales. 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. The most optimistic Ardelyx analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$11.00. 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.
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. One more thing stood out to us about these estimates, and it's the idea that Ardelyx'sdecline is expected to accelerate, with revenues forecast to fall 24% next year, topping off a historical decline of 18% a year over the past five years. Compare this against analyst estimates for companies in the wider industry, which suggest that revenues (in aggregate) are expected to grow 21% next year. So while a broad number of companies are forecast to decline, unfortunately Ardelyx is expected to see its sales affected worse than other companies in the industry.