Akebia Therapeutics, Inc. (NASDAQ:AKBA) Analysts Are Cutting Their Estimates: Here's What You Need To Know
It's shaping up to be a tough period for Akebia Therapeutics, Inc. (NASDAQ:AKBA), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. It was not a great statutory result, with revenues coming in 21% lower than the analysts predicted. Unsurprisingly, earnings also fell seriously short of forecasts, turning into a per-share loss of US$0.05. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the six analysts covering Akebia Therapeutics provided consensus estimates of US$107.5m revenue in 2027, which would reflect a painful 45% decline over the past 12 months. Per-share losses are expected to explode, reaching US$0.35 per share. Before this earnings announcement, the analysts had been modelling revenues of US$132.5m and losses of US$0.32 per share in 2027. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.
Check out our latest analysis for Akebia Therapeutics
The consensus price target fell 17% to US$3.25, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Akebia Therapeutics, with the most bullish analyst valuing it at US$4.50 and the most bearish at US$1.00 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. 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.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. Over the past five years, revenues have declined around 4.2% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 38% decline in revenue until the end of 2027. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 22% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Akebia Therapeutics to suffer worse than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Akebia Therapeutics. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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 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 Akebia Therapeutics going out to 2028, and you can see them free on our platform here..
You still need to take note of risks, for example - Akebia Therapeutics has 2 warning signs (and 1 which can't be ignored) we think you should know about.
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