Agios Pharmaceuticals, Inc. (NASDAQ:AGIO) Just Released Its Second-Quarter Earnings: Here's What Analysts Think

Agios Pharmaceuticals, Inc. (NASDAQ:AGIO) just released its latest second-quarter report and things are not looking great. The numbers were fairly weak, with revenue of US$8.6m missing analyst predictions by 7.4%, and (statutory) losses of US$1.69 per share being slightly larger than what the analysts had expected. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Agios Pharmaceuticals

Taking into account the latest results, the consensus forecast from Agios Pharmaceuticals' eight analysts is for revenues of US$38.2m in 2024. This reflects a major 22% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Agios Pharmaceuticals forecast to report a statutory profit of US$2.03 per share. Before this earnings report, the analysts had been forecasting revenues of US$40.6m and earnings per share (EPS) of US$1.77 in 2024. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the nice gain to to the earnings per share numbers.

There's been no real change to the average price target of US$54.33, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. 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. There are some variant perceptions on Agios Pharmaceuticals, with the most bullish analyst valuing it at US$60.00 and the most bearish at US$46.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Agios Pharmaceuticals is an easy business to forecast or the the analysts are all using similar assumptions.

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. For example, we noticed that Agios Pharmaceuticals' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 49% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 36% 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 18% annually. So it looks like Agios Pharmaceuticals is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Agios Pharmaceuticals' earnings potential next year. They also downgraded Agios Pharmaceuticals' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Even so, earnings are more important to the intrinsic value of the business. 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 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 Agios Pharmaceuticals going out to 2026, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Agios Pharmaceuticals 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com