Codexis, Inc. (NASDAQ:CDXS) Just Released Its First-Quarter Results And Analysts Are Updating Their Estimates

Codexis, Inc. (NASDAQ:CDXS) missed earnings with its latest first-quarter results, disappointing overly-optimistic forecasters. Earnings missed the mark, with revenues of US$7.5m falling badly (22%) short of expectations. Losses were mildly higher, with a US$0.25 per-share loss being 5.4% above what the analysts modelled. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Following the latest results, Codexis' seven analysts are now forecasting revenues of US$65.5m in 2025. This would be a substantial 31% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 23% to US$0.69. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$65.7m and losses of US$0.72 per share in 2025. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.

Check out our latest analysis for Codexis

The average price target held steady at US$7.08, seeming to indicate that business is performing in line with expectations. 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 Codexis analyst has a price target of US$11.00 per share, while the most pessimistic values it at US$3.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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. One thing stands out from these estimates, which is that Codexis is forecast to grow faster in the future than it has in the past, with revenues expected to display 44% annualised growth until the end of 2025. If achieved, this would be a much better result than the 3.2% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 6.0% per year. Not only are Codexis' revenues expected to improve, it seems that the analysts are also expecting it 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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$7.08, 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 forecasts for Codexis going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 4 warning signs for Codexis (1 can't be ignored!) that you should be aware 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.