Analyst Estimates: Here's What Brokers Think Of Ardelyx, Inc. (NASDAQ:ARDX) After Its Third-Quarter Report

The investors in Ardelyx, Inc.'s (NASDAQ:ARDX) will be rubbing their hands together with glee today, after the share price leapt 20% to US$6.06 in the week following its third-quarter results. Revenues beat expectations, coming in 9.7% ahead of forecasts, and the company broke even on a statutory earnings per share (EPS) level. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ardelyx after the latest results.

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Taking into account the latest results, the most recent consensus for Ardelyx from twelve analysts is for revenues of US$505.3m in 2026. If met, it would imply a huge 27% increase on its revenue over the past 12 months. Earnings are expected to improve, with Ardelyx forecast to report a statutory profit of US$0.031 per share. Before this latest report, the consensus had been expecting revenues of US$487.4m and US$0.0046 per share in losses. The analysts have definitely been lifting their expectations, with the company expected to reach profitability next year - sooner than expected - thanks to the small increase to revenue expectations.

View our latest analysis for Ardelyx

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$11.45, suggesting that the forecast performance does not have a long term impact on the company'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. The most optimistic Ardelyx analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$8.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Ardelyx's revenue growth is expected to slow, with the forecast 21% annualised growth rate until the end of 2026 being well below the historical 66% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 22% annually. Factoring in the forecast slowdown in growth, it looks like Ardelyx is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been a clear step-change in belief around the business' prospects, with the analysts now expecting Ardelyx to become profitable next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Ardelyx will grow in line with the overall 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.

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 Ardelyx going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Ardelyx , and understanding this should be part of your investment process.

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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.