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Celebrations may be in order for XOMA Royalty Corporation (NASDAQ:XOMA) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. XOMA Royalty has also found favour with investors, with the stock up a noteworthy 18% to US$28.13 over the past week. Could this upgrade be enough to drive the stock even higher?
Following the upgrade, the most recent consensus for XOMA Royalty from its three analysts is for revenues of US$26m in 2024 which, if met, would be a substantial 70% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 94% to US$0.12 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$21m and losses of US$1.89 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
View our latest analysis for XOMA Royalty
The consensus price target rose 43% to US$83.00, with the analysts encouraged by the higher revenue and lower forecast losses for this year.
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. For example, we noticed that XOMA Royalty's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 190% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 8.3% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 23% annually. Not only are XOMA Royalty's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around XOMA Royalty's prospects. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at XOMA Royalty.