XOMA Royalty Corporation (NASDAQ:XOMA) came out with its third-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues of US$7.2m beat expectations by a respectable 4.2%, although statutory losses per share increased. XOMA Royalty lost US$1.59, which was 283% more than what the analysts had included in their models. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for XOMA Royalty

Taking into account the latest results, the most recent consensus for XOMA Royalty from three analysts is for revenues of US$35.9m in 2025. If met, it would imply a sizeable 66% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 80% to US$0.59. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$33.7m and losses of US$1.32 per share in 2025. 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.

It will come as no surprise to learn thatthe analysts have increased their price target for XOMA Royalty 43% to US$83.00on the back of these upgrades. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic XOMA Royalty analyst has a price target of US$117 per share, while the most pessimistic values it at US$49.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that XOMA Royalty is forecast to grow faster in the future than it has in the past, with revenues expected to display 50% annualised growth until the end of 2025. If achieved, this would be a much better result than the 9.5% annual decline 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 21% annually. So it looks like XOMA Royalty is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 XOMA Royalty analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for XOMA Royalty you should know about.

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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.