KNSA) After Its First-Quarter Report
It’s been a good week for Kiniksa Pharmaceuticals, Ltd. (NASDAQ:KNSA) shareholders, because the company has just released its latest quarterly results, and the shares gained 4.3% to US$17.61. It was a pretty bad result overall; while revenues were in line with expectations at US$80m, statutory losses exploded to US$0.25 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Kiniksa Pharmaceuticals
Taking into account the latest results, the consensus forecast from Kiniksa Pharmaceuticals’ five analysts is for revenues of US$386.8m in 2024. This reflects a sizeable 28% improvement in revenue compared to the last 12 months. Earnings are expected to tip over into lossmaking territory, with the analysts forecasting statutory losses of -US$0.15 per share in 2024. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$383.0m and losses of US$0.17 per share in 2024. Although the revenue estimates have not really changed Kiniksa Pharmaceuticals’future looks a little different to the past, with a cut to the loss per share forecasts in particular.
There’s been no major changes to the consensus price target of US$29.20, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock’s valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Kiniksa Pharmaceuticals at US$32.00 per share, while the most bearish prices it at US$26.00. The narrow spread of estimates could suggest that the business’ future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
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. It’s pretty clear that there is an expectation that Kiniksa Pharmaceuticals’ revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 39% growth on an annualised basis. This is compared to a historical growth rate of 73% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 17% annually. Even after the forecast slowdown in growth, it seems obvious that Kiniksa Pharmaceuticals is also expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$29.20, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that 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 Kiniksa Pharmaceuticals going out to 2026, and you can see them free on our platform here..
Even so, be aware that Kiniksa Pharmaceuticals is showing 1 warning sign in our investment analysis , you should know about…
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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.
