Earnings Beat: Ardelyx, Inc. (NASDAQ:ARDX) Just Beat Analyst Forecasts, And Analysts Have Been Lifting Their Forecasts

Ardelyx, Inc. (NASDAQ:ARDX) just released its latest second-quarter results and things are looking bullish. The results were impressive, with revenues of US$73m exceeding analyst forecasts by 33%, and statutory losses of US$0.07 were likewise much smaller than the analysts had forecast. 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.

View our latest analysis for Ardelyx

Following the latest results, Ardelyx's ten analysts are now forecasting revenues of US$304.3m in 2024. This would be a sizeable 45% improvement in revenue compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$0.27. Before this latest report, the consensus had been expecting revenues of US$243.1m and US$0.34 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

There was no major change to the consensus price target of US$11.17, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. 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. The most optimistic Ardelyx analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$7.00. 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 Ardelyx's past performance and to peers in the same industry. The analysts are definitely expecting Ardelyx's growth to accelerate, with the forecast 110% annualised growth to the end of 2024 ranking favourably alongside historical growth of 73% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Ardelyx to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$11.17, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple Ardelyx analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Ardelyx that you need to be mindful 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