Earnings Update: Ardelyx, Inc. (NASDAQ:ARDX) Just Reported Its Third-Quarter Results And Analysts Are Updating Their Forecasts

Investors in Ardelyx, Inc. (NASDAQ:ARDX) had a good week, as its shares rose 5.5% to close at US$6.09 following the release of its quarterly results. Revenues beat expectations, coming in 13% ahead of forecasts, and the company broke even on a statutory earnings per share (EPS) level. 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. 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.

Check out our latest analysis for Ardelyx

Following the latest results, Ardelyx's ten analysts are now forecasting revenues of US$387.8m in 2025. This would be a huge 54% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 93% to US$0.023. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$404.4m and losses of US$0.10 per share in 2025. Although the revenue estimates have fallen somewhat, Ardelyx'sfuture looks a little different to the past, with a very promising decrease in the loss per share forecasts in particular.

The consensus price target was broadly unchanged at US$11.28, implying that the business is performing roughly in line with expectations, despite adjustments to both revenue and earnings estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Ardelyx's revenue growth is expected to slow, with the forecast 41% annualised growth rate until the end of 2025 being well below the historical 72% 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) 21% per year. Even after the forecast slowdown in growth, it seems obvious that Ardelyx is also expected 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. With that said, earnings are more important to the long-term value of the business. The consensus price target held steady at US$11.28, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple Ardelyx analysts - going out to 2026, 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 2 warning signs with Ardelyx , and understanding these 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.