Analysts Just Made A Noticeable Upgrade To Their Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) Forecasts

Shareholders in Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Following the latest upgrade, the current consensus, from the five analysts covering Lexicon Pharmaceuticals, is for revenues of US$14m in 2025, which would reflect a stressful 56% reduction in Lexicon Pharmaceuticals' sales over the past 12 months. Losses are predicted to fall substantially, shrinking 33% to US$0.33 per share. However, before this estimates update, the consensus had been expecting revenues of US$9.3m and US$0.37 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

View our latest analysis for Lexicon Pharmaceuticals

Despite these upgrades, the analysts have not made any major changes to their price target of US$2.58, implying that their latest estimates don't have a long term impact on what they think the stock is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would also point out that the forecast 66% annualised revenue decline to the end of 2025 is roughly in line with the historical trend, which saw revenues shrink 82% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 17% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Lexicon Pharmaceuticals to suffer worse than the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Lexicon Pharmaceuticals is moving incrementally towards profitability. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Lexicon Pharmaceuticals could be a good candidate for more research.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential concern with Lexicon Pharmaceuticals, including a short cash runway. For more information, you can click through to our platform to learn more about this and the 1 other concern we've identified .

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.