Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE) Just Reported Second-Quarter Earnings And Analysts Are Lifting Their Estimates

Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE) defied analyst predictions to release its second-quarter results, which were ahead of market expectations. Sales crushed expectations at US$14m, beating expectations by 37%. Aeglea BioTherapeutics reported a statutory loss of US$0.10 per share, which - although not amazing - was much smaller than the analysts predicted. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Aeglea BioTherapeutics

Following the latest results, Aeglea BioTherapeutics' five analysts are now forecasting revenues of US$18.9m in 2021. This would be a sizeable 38% improvement in sales compared to the last 12 months. Losses are expected to hold steady at around US$1.04. Before this earnings announcement, the analysts had been modelling revenues of US$11.3m and losses of US$1.24 per share in 2021. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

The consensus price target fell 5.9%, to US$13.57, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook. 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 Aeglea BioTherapeutics, with the most bullish analyst valuing it at US$20.00 and the most bearish at US$9.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Aeglea BioTherapeutics' past performance and to peers in the same industry. It's clear from the latest estimates that Aeglea BioTherapeutics' rate of growth is expected to accelerate meaningfully, with the forecast 91% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 11% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 10% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Aeglea BioTherapeutics 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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Aeglea BioTherapeutics going out to 2023, and you can see them free on our platform here.

Before you take the next step you should know about the 4 warning signs for Aeglea BioTherapeutics (1 can't be ignored!) that we have uncovered.

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