Upgrade: Analysts Just Made A Huge Increase To Their Xencor, Inc. (NASDAQ:XNCR) Forecasts

Xencor, Inc. (NASDAQ:XNCR) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the latest consensus from Xencor's ten analysts is for revenues of US$130m in 2021, which would reflect a modest 5.0% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 15% from last year to US$0.94. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$91m and losses of US$2.05 per share in 2021. 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.

See our latest analysis for Xencor

There was no major change to the consensus price target of US$53.42, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Xencor analyst has a price target of US$63.00 per share, while the most pessimistic values it at US$34.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. We would highlight that Xencor's revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2021 being well below the historical 15% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.4% annually. Factoring in the forecast slowdown in growth, it looks like Xencor is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Xencor is moving incrementally towards profitability. They also upgraded their revenue forecasts, although the latest estimates suggest that Xencor will grow in line with the overall 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 Xencor could be a good candidate for more research.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Xencor going out to 2023, and you can see them free on our platform here..

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. 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.
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