The analysts might have been a bit too bullish on Nektar Therapeutics (NASDAQ:NKTR), given that the company fell short of expectations when it released its quarterly results last week. Statutory earnings fell substantially short of expectations, with revenues of US$10m missing forecasts by 32%. Losses exploded, with a per-share loss of US$0.24 some 44% below prior forecasts. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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After the latest results, the consensus from Nektar Therapeutics' eight analysts is for revenues of US$40.0m in 2025, which would reflect a substantial 54% decline in revenue compared to the last year of performance. Per-share losses are supposed to see a sharp uptick, reaching US$0.85. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$61.6m and losses of US$0.66 per share in 2025. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out our latest analysis for Nektar Therapeutics

The average price target was broadly unchanged at US$4.92, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Nektar Therapeutics, with the most bullish analyst valuing it at US$7.00 and the most bearish at US$2.00 per share. 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.

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. One more thing stood out to us about these estimates, and it's the idea that Nektar Therapeutics' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 65% to the end of 2025. This tops off a historical decline of 12% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 8.3% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Nektar Therapeutics to suffer worse than the wider industry.

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The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Nektar Therapeutics. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 Nektar Therapeutics analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Nektar Therapeutics (1 is significant!) that we have uncovered.

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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.