Earnings Update: Here's Why Analysts Just Lifted Their Exagen Inc. (NASDAQ:XGN) Price Target To US$7.75

As you might know, Exagen Inc. (NASDAQ:XGN) recently reported its quarterly numbers. It looks like a positive result overall, with revenues of US$15m beating forecasts by 6.5%. Statutory losses of US$0.20 per share were roughly in line with what the analysts had forecast. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

We've discovered 2 warning signs about Exagen. View them for free.

Taking into account the latest results, the most recent consensus for Exagen from five analysts is for revenues of US$65.9m in 2025. If met, it would imply a notable 16% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 34% to US$0.57. Before this earnings announcement, the analysts had been modelling revenues of US$64.7m and losses of US$0.56 per share in 2025.

See our latest analysis for Exagen

The average price target fell 15% to US$7.75, with the ongoing losses seemingly a concern for the analysts, despite the lack of real change to the earnings forecasts. 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 Exagen, with the most bullish analyst valuing it at US$9.00 and the most bearish at US$7.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Exagen's growth to accelerate, with the forecast 22% annualised growth to the end of 2025 ranking favourably alongside historical growth of 7.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Exagen to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 Exagen. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Exagen going out to 2027, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for Exagen 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.