Party Time: Brokers Just Made Major Increases To Their Ardelyx, Inc. (NASDAQ:ARDX) Earnings Forecasts

Ardelyx, Inc. (NASDAQ:ARDX) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market may be pricing in some blue sky too, with the share price gaining 10% to US$6.08 in the last 7 days. Could this upgrade be enough to drive the stock even higher?

Following the upgrade, the most recent consensus for Ardelyx from its ten analysts is for revenues of US$304m in 2024 which, if met, would be a sizeable 45% increase on its sales over the past 12 months. Losses are forecast to narrow 5.6% to US$0.26 per share. However, before this estimates update, the consensus had been expecting revenues of US$243m and US$0.33 per share in losses. 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.

View our latest analysis for Ardelyx

There was no major change to the consensus price target of US$11.28, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Ardelyx's growth to accelerate, with the forecast 109% annualised growth to the end of 2024 ranking favourably alongside historical growth of 73% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. 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 important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Ardelyx's prospects. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Ardelyx.

Better yet, Ardelyx is expected to break-even soon - within the next few years - according to analyst forecasts, which would be a momentous event for shareholders. For more information, you can click through to our free platform to learn more about these forecasts.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.

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