As you might know, Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) last week released its latest second-quarter, and things did not turn out so great for shareholders. Statutory earnings fell substantially short of expectations, with revenues of US$692k missing forecasts by 83%. Losses exploded, with a per-share loss of US$0.07 some 40% below prior forecasts. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Following the recent earnings report, the consensus from five analysts covering Lexicon Pharmaceuticals is for revenues of US$36.4m in 2026. This implies a considerable 12% decline in revenue compared to the last 12 months. Per-share losses are expected to explode, reaching US$0.17 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$38.2m and losses of US$0.16 per share in 2026. So it's pretty clear the analysts have mixed opinions on Lexicon Pharmaceuticals after this update; revenues were downgraded and per-share losses expected to increase.

The average price target was broadly unchanged at US$3.86, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. 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. Currently, the most bullish analyst values Lexicon Pharmaceuticals at US$6.00 per share, while the most bearish prices it at US$2.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. 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. We would highlight that revenue is expected to reverse, with a forecast 23% annualised decline to the end of 2026. That is a notable change from historical growth of 73% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.2% per year. It's pretty clear that Lexicon Pharmaceuticals' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Lexicon Pharmaceuticals. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Lexicon Pharmaceuticals. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Lexicon Pharmaceuticals going out to 2028, and you can see them free on our platform here..

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.