Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The analysts have sharply increased their revenue numbers, with a view that Lexicon Pharmaceuticals will make substantially more sales than they'd previously expected. Lexicon Pharmaceuticals has also found favour with investors, with the stock up a noteworthy 16% to US$1.87 over the past week. Could this upgrade be enough to drive the stock even higher?
Following the latest upgrade, the current consensus, from the six analysts covering Lexicon Pharmaceuticals, is for revenues of US$21m in 2027, which would reflect a painful 44% reduction in Lexicon Pharmaceuticals' sales over the past 12 months. Per-share losses are expected to explode, reaching US$0.20 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$17m and losses of US$0.20 per share in 2027. So there's been quite a change-up of views after the recent consensus updates, withthe analysts noticeably increasing their revenue forecasts while also expecting losses per share to hold steady.
Check out our latest analysis for Lexicon Pharmaceuticals
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. We would highlight that sales are expected to reverse, with a forecast 37% annualised revenue decline to the end of 2027. That is a notable change from historical growth of 70% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.6% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Lexicon Pharmaceuticals is expected to lag the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses next year, perhaps suggesting Lexicon Pharmaceuticals is moving incrementally towards profitability. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Lexicon Pharmaceuticals.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Lexicon Pharmaceuticals going out to 2028, and you can see them free on our platform here..
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