XOMA Royalty Corporation (NASDAQ:XOMA) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. XOMA Royalty has also found favour with investors, with the stock up a remarkable 15% to US$26.46 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.
Following the upgrade, the current consensus from XOMA Royalty's three analysts is for revenues of US$26m in 2024 which - if met - would reflect a sizeable 73% increase on its sales over the past 12 months. The loss per share is expected to ameliorate slightly, reducing to US$1.89. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$21m and losses of US$1.89 per share in 2024. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that XOMA Royalty's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 200% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 8.3% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 23% annually. So it looks like XOMA Royalty is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting XOMA Royalty 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. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at XOMA Royalty.
It's great to see the analysts upgrading their estimates, but the biggest highlight to us is that the business is expected to become profitable in the foreseeable future. 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.
