Agilyx ASA (OB:AGLX) Just Reported And Analysts Have Been Cutting Their Estimates

It's shaping up to be a tough period for Agilyx ASA (OB:AGLX), which a week ago released some disappointing yearly results that could have a notable impact on how the market views the stock. It was a pretty negative result overall, with revenues of US$16m missing analyst predictions by 7.0%. Worse, the business reported a statutory loss of US$0.28 per share, much larger than the analysts had forecast prior to the result. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Agilyx

Taking into account the latest results, the consensus forecast from Agilyx's four analysts is for revenues of US$47.0m in 2023, which would reflect a huge 185% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 70% to US$0.077. Before this earnings announcement, the analysts had been modelling revenues of US$50.8m and losses of US$0.075 per share in 2023.

There was no real change to the average price target of kr65.89, suggesting that the revisions to revenue estimates are not expected to have a long-term impact on Agilyx's valuation. 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. Currently, the most bullish analyst values Agilyx at kr72.97 per share, while the most bearish prices it at kr61.54. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. 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.

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. The analysts are definitely expecting Agilyx's growth to accelerate, with the forecast 185% annualised growth to the end of 2023 ranking favourably alongside historical growth of 66% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Agilyx is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Agilyx. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Agilyx going out to 2025, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Agilyx (1 doesn't sit too well with us) 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.