Shareholders might have noticed that Karyopharm Therapeutics Inc. (NASDAQ:KPTI) filed its second-quarter result this time last week. The early response was not positive, with shares down 9.2% to US$0.84 in the past week. It was a solid earnings report, with revenues and earnings both coming in very strong. Revenues were 18% higher than the analysts had forecast, at US$43m, while the company also delivered a surprise statutory profit, against analyst expectations of a loss. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from Karyopharm Therapeutics' six analysts is for revenues of US$152.6m in 2024. This would reflect a satisfactory 4.8% increase on its revenue over the past 12 months. The loss per share is expected to ameliorate slightly, reducing to US$0.69. Before this earnings announcement, the analysts had been modelling revenues of US$145.3m and losses of US$1.23 per share in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a considerable decrease in loss per share in particular.
The consensus price target fell 14%, to US$4.36, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Karyopharm Therapeutics, with the most bullish analyst valuing it at US$7.00 and the most bearish at US$2.00 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
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 Karyopharm Therapeutics' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 9.7% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 18% annually. Factoring in the forecast slowdown in growth, it seems obvious that Karyopharm Therapeutics is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than 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 Karyopharm Therapeutics' future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Karyopharm Therapeutics analysts - going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 3 warning signs for Karyopharm Therapeutics you should be aware of, and 1 of them shouldn't be ignored.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.