Earnings Update: Here's Why Analysts Just Lifted Their Akebia Therapeutics, Inc. (NASDAQ:AKBA) Price Target To US$7.83

Shareholders of Akebia Therapeutics, Inc. (NASDAQ:AKBA) will be pleased this week, given that the stock price is up 19% to US$2.26 following its latest yearly results. The results were mixed overall, with revenues slightly ahead of analyst estimates at US$160m. Statutory losses by contrast were 7.6% larger than predictions at US$0.33 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Akebia Therapeutics

Taking into account the latest results, the most recent consensus for Akebia Therapeutics from three analysts is for revenues of US$193.8m in 2025. If met, it would imply a huge 21% increase on its revenue over the past 12 months. Losses are supposed to decline, shrinking 15% from last year to US$0.25. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$180.2m and losses of US$0.16 per share in 2025. While this year's revenue estimates increased, there was also a considerable increase to loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

It will come as a surprise to learn that the consensus price target rose 9.3% to US$7.83, with the analysts clearly more interested in growing revenue, even as losses intensify. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Akebia Therapeutics, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$6.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Akebia Therapeutics shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Akebia Therapeutics' past performance and to peers in the same industry. For example, we noticed that Akebia Therapeutics' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 21% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 13% a year 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 revenue grow 20% per year. So it looks like Akebia Therapeutics is expected to grow at about the same rate as 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. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Akebia Therapeutics going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Akebia Therapeutics has 3 warning signs (and 2 which are concerning) we think you should know about.

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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.