The latest analyst coverage could presage a bad day for Akebia Therapeutics, Inc. (NASDAQ:AKBA), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the latest downgrade, the six analysts covering Akebia Therapeutics provided consensus estimates of US$108m revenue in 2027, which would reflect a stressful 45% decline on its sales over the past 12 months. Losses are supposed to balloon 120% to US$0.35 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$133m and losses of US$0.32 per share in 2027. 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.
See our latest analysis for Akebia Therapeutics
The consensus price target fell 17% to US$3.25, implicitly signalling that lower earnings per share are a leading indicator for Akebia Therapeutics’ valuation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Over the past five years, revenues have declined around 4.2% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 38% decline in revenue until the end of 2027. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 22% annually. So it’s pretty clear that, while it does have declining revenues, the analysts also expect Akebia Therapeutics to suffer worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Akebia Therapeutics’ 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 Akebia Therapeutics.
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 Akebia Therapeutics going out to 2028, and you can see them free on our platform here.
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