Xencor, Inc. (NASDAQ:XNCR) Just Reported And Analysts Have Been Cutting Their Estimates

Shareholders of Xencor, Inc. (NASDAQ:XNCR) will be pleased this week, given that the stock price is up 11% to US$23.62 following its latest third-quarter results. It looks like weak result overall, with ongoing losses and revenues of US$11m falling short of analyst predictions. The losses were a relative bright spot though, with a per-share (statutory) loss of US$0.71 being 30% smaller than what the analysts had presumed. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Xencor after the latest results.

Check out our latest analysis for Xencor

Taking into account the latest results, the consensus forecast from Xencor's ten analysts is for revenues of US$115.8m in 2025. This reflects a huge 36% improvement in revenue compared to the last 12 months. Per-share losses are expected to explode, reaching US$3.68 per share. Before this latest report, the consensus had been expecting revenues of US$133.9m and US$3.15 per share in losses. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

The average price target was broadly unchanged at US$33.18, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Xencor at US$50.00 per share, while the most bearish prices it at US$20.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. It's clear from the latest estimates that Xencor's rate of growth is expected to accelerate meaningfully, with the forecast 28% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 2.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 21% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Xencor is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also downgraded Xencor's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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

Before you take the next step you should know about the 2 warning signs for Xencor that we have uncovered.

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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.