Ikena Oncology, Inc. (NASDAQ:IKNA) Reported Earnings Last Week And Analysts Are Already Upgrading Their Estimates

Ikena Oncology, Inc. (NASDAQ:IKNA) just released its annual report and things are looking bullish. The results were impressive, with revenues of US$31m exceeding analyst forecasts by 99%, and statutory losses of US$1.22 were likewise much smaller than the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Ikena Oncology

Following last week's earnings report, Ikena Oncology's five analysts are forecasting 2022 revenues to be US$30.6m, approximately in line with the last 12 months. Losses are forecast to balloon 41% to US$1.33 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$26.5m and losses of US$1.93 per share in 2022. 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.

Despite these upgrades,the analysts have not made any major changes to their price target of US$25.33, implying that their latest estimates don't have a long term impact on what they think the stock is worth. 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. There are some variant perceptions on Ikena Oncology, with the most bullish analyst valuing it at US$27.00 and the most bearish at US$24.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 1.3% by the end of 2022. This indicates a significant reduction from annual growth of 44% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Ikena Oncology is expected to lag 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. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Ikena Oncology. Long-term earnings power is much more important than next year's profits. We have forecasts for Ikena Oncology going out to 2024, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with Ikena Oncology (including 1 which is potentially serious) .

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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.