One thing we could say about the analysts on Xencor, Inc. (NASDAQ:XNCR) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the consensus from 13 analysts covering Xencor is for revenues of US$69m in 2026, implying a disturbing 29% decline in sales compared to the last 12 months. Losses are supposed to balloon 68% to US$3.90 per share. However, before this estimates update, the consensus had been expecting revenues of US$117m and US$2.88 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

There was no major change to the consensus price target of US$28.50, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.

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. Over the past five years, revenues have declined around 14% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 37% decline in revenue until the end of 2026. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 22% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Xencor to suffer worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Xencor. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Xencor after the downgrade.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Xencor analysts - going out to 2028, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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.