CytomX Therapeutics, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

CytomX Therapeutics, Inc. (NASDAQ:CTMX) just released its quarterly report and things are looking bullish. Statutory earnings performance was extremely strong, with revenue of US$51m beating expectations by 44% and earnings per share (EPS) of US$0.27, an impressive 53%ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the consensus from CytomX Therapeutics' four analysts is for revenues of US$102.3m in 2025, which would reflect a disturbing 31% decline in revenue compared to the last year of performance. Earnings are expected to tip over into lossmaking territory, with the analysts forecasting statutory losses of -US$0.052 per share in 2025. In the lead-up to this report, the analysts had been modelling revenues of US$106.1m and earnings per share (EPS) of US$0.31 in 2025. There looks to have been a significant drop in sentiment regarding CytomX Therapeutics' prospects after these latest results, with a minor downgrade to revenues and the analysts now forecasting a loss instead of a profit.

Check out our latest analysis for CytomX Therapeutics

The average price target lifted 16% to US$5.50, clearly signalling that the weaker revenue and EPS outlook are not expected to weigh on the stock over the longer term. 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. There are some variant perceptions on CytomX Therapeutics, with the most bullish analyst valuing it at US$8.00 and the most bearish at US$3.50 per share. 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 CytomX Therapeutics' past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 39% by the end of 2025. This indicates a significant reduction from annual growth of 17% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 17% per year. It's pretty clear that CytomX Therapeutics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for CytomX Therapeutics dropped from profits to a loss next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on CytomX Therapeutics. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple CytomX Therapeutics analysts - going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with CytomX Therapeutics .

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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.