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

Shareholders might have noticed that Karyopharm Therapeutics Inc. (NASDAQ:KPTI) filed its second-quarter result this time last week. The early response was not positive, with shares down 9.2% to US$0.84 in the past week. It was a solid earnings report, with revenues and earnings both coming in very strong. Revenues were 18% higher than the analysts had forecast, at US$43m, while the company also delivered a surprise statutory profit, against analyst expectations of a loss. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Karyopharm Therapeutics

Following the latest results, Karyopharm Therapeutics' six analysts are now forecasting revenues of US$152.6m in 2024. This would be a satisfactory 4.8% improvement in revenue compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$0.69. Before this latest report, the consensus had been expecting revenues of US$145.3m and US$1.23 per share in losses. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a considerable decrease in loss per share in particular.

Yet despite these upgrades, the analysts cut their price target 14% to US$4.36, implicitly signalling that the ongoing losses are likely to weigh negatively on Karyopharm Therapeutics' valuation. 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 Karyopharm Therapeutics, with the most bullish analyst valuing it at US$7.00 and the most bearish at US$2.00 per share. 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.

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 Karyopharm Therapeutics' revenue growth is expected to slow, with the forecast 9.7% annualised growth rate until the end of 2024 being well below the historical 22% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 18% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Karyopharm Therapeutics.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Karyopharm Therapeutics' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Karyopharm Therapeutics. Long-term earnings power is much more important than next year's profits. We have forecasts for Karyopharm Therapeutics going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for Karyopharm Therapeutics (of which 1 is a bit unpleasant!) you should know about.

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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.