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Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) shareholders are probably feeling a little disappointed, since its shares fell 7.7% to US$35.98 in the week after its latest first-quarter results. Revenues of US$139m came in 3.6% below estimates, but statutory losses were slightly better than expected, at US$1.57 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
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Taking into account the latest results, the most recent consensus for Ultragenyx Pharmaceutical from 19 analysts is for revenues of US$649.5m in 2025. If met, it would imply a decent 10.0% increase on its revenue over the past 12 months. Losses are expected to be contained, narrowing 11% from last year to US$5.16. Before this latest report, the consensus had been expecting revenues of US$655.8m and US$5.21 per share in losses.
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As a result there was no major change to the consensus price target of US$90.15, implying that the business is trading roughly in line with expectations despite ongoing losses. 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 Ultragenyx Pharmaceutical analyst has a price target of US$136 per share, while the most pessimistic values it at US$39.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on 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. It's pretty clear that there is an expectation that Ultragenyx Pharmaceutical's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 13% growth on an annualised basis. This is compared to a historical growth rate of 19% 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 17% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Ultragenyx Pharmaceutical.