Celebrations may be in order for Ardelyx, Inc. (NASDAQ:ARDX) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

After the upgrade, the ten analysts covering Ardelyx are now predicting revenues of US$304m in 2024. If met, this would reflect a huge 45% improvement in sales compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$0.26. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$243m and losses of US$0.33 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

Despite these upgrades, the analysts have not made any major changes to their price target of US$11.28, implying that their latest estimates don't have a long term impact on what they think the stock is worth.

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. The analysts are definitely expecting Ardelyx's growth to accelerate, with the forecast 109% annualised growth to the end of 2024 ranking favourably alongside historical growth of 73% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Ardelyx to grow faster than the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Ardelyx is moving incrementally towards profitability. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Ardelyx could be a good candidate for more research.

Better yet, Ardelyx is expected to break-even soon - within the next few years - according to analyst forecasts, which would be a momentous event for shareholders. For more information, you can click through to our free platform to learn more about these forecasts.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.