Stock Analysis

Analyst Estimates: Here's What Brokers Think Of argenx SE (EBR:ARGX) After Its Yearly Report

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It's been a good week for argenx SE (EBR:ARGX) shareholders, because the company has just released its latest yearly results, and the shares gained 8.0% to €370. Revenue of US$1.3b came in 3.3% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$5.26, a 11% miss. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for argenx

ENXTBR:ARGX Earnings and Revenue Growth March 24th 2024

Taking into account the latest results, the consensus forecast from argenx's 30 analysts is for revenues of US$1.83b in 2024. This reflects a huge 44% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 71% to US$1.43. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.83b and losses of US$1.64 per share in 2024. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a favorable reduction in losses per share in particular.

There's been no major changes to the consensus price target of €439, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic argenx analyst has a price target of €632 per share, while the most pessimistic values it at €165. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of argenx'shistorical trends, as the 44% annualised revenue growth to the end of 2024 is roughly in line with the 54% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 19% per year. So although argenx is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at €439, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on argenx. Long-term earnings power is much more important than next year's profits. We have forecasts for argenx going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for argenx that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.