Xencor, Inc. (NASDAQ:XNCR) Analysts Just Cut Their EPS Forecasts Substantially

One thing we could say about the analysts on Xencor, Inc. (NASDAQ:XNCR) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the latest downgrade, the current consensus, from the 13 analysts covering Xencor, is for revenues of US$92m in 2024, which would reflect a painful 37% reduction in Xencor's sales over the past 12 months. Losses are supposed to balloon 84% to US$3.60 per share. However, before this estimates update, the consensus had been expecting revenues of US$169m and US$2.75 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for Xencor

The consensus price target fell 8.9% to US$39.71, implicitly signalling that lower earnings per share are a leading indicator for Xencor's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Xencor's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 31% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 14% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 15% per year. It's pretty clear that Xencor's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at Xencor. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Xencor's revenues are expected to grow slower than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Xencor.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Xencor going out to 2025, 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 downgrading 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. 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.