Yahoo Finance REGENXBIO Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
Last week saw the newest quarterly earnings release from REGENXBIO Inc. (NASDAQ:RGNX), an important milestone in the company's journey to build a stronger business. Revenues beat expectations by 249%, and sales of US$99m were sufficient to generate a statutory profit of US$0.23 - a pleasant surprise given that the analysts were forecasting a loss! The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for REGENXBIO
Following the latest results, REGENXBIO's five analysts are now forecasting revenues of US$169.7m in 2021. This would be a solid 17% improvement in sales compared to the last 12 months. Losses are expected to hold steady at around US$2.50. Before this earnings announcement, the analysts had been modelling revenues of US$183.6m and losses of US$1.89 per share in 2021. So it's pretty clear the analysts have mixed opinions on REGENXBIO after this update; revenues were downgraded and per-share losses expected to increase.
The average price target fell 5.1% to US$58.00, implicitly signalling that lower earnings per share are a leading indicator for REGENXBIO's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on REGENXBIO, with the most bullish analyst valuing it at US$100.00 and the most bearish at US$31.00 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
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. It's pretty clear that there is an expectation that REGENXBIO's revenue growth will slow down substantially, with revenues next year expected to grow 17%, compared to a historical growth rate of 38% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 20% next year. So it's pretty clear that, while REGENXBIO's revenue growth is expected to slow, it's expected to grow roughly in line with the 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 their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of REGENXBIO's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for REGENXBIO going out to 2024, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for REGENXBIO (1 is concerning!) that you should be aware of.
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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