Shareholders will be ecstatic, with their stake up 20% over the past week following Codexis, Inc.'s (NASDAQ:CDXS) latest third-quarter results. Results overall weren't great; even though revenues of US$13m beat expectations by 12%, statutory losses ballooned to US$0.29 per share, substantially worse than the analysts had expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following last week's earnings report, Codexis' six analysts are forecasting 2025 revenues to be US$65.0m, approximately in line with the last 12 months. Losses are supposed to decline, shrinking 20% from last year to US$0.70. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$65.8m and losses of US$0.75 per share in 2025. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.
These new estimates led to the consensus price target rising 23% to US$7.17, with lower forecast losses suggesting things could be looking up for Codexis. 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 Codexis at US$11.00 per share, while the most bearish prices it at US$3.00. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Codexis' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 0.6% growth on an annualised basis. This is compared to a historical growth rate of 3.5% 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 6.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that Codexis is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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. We have estimates - from multiple Codexis analysts - going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Codexis has 1 warning sign we think you should be aware of.
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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.
