On Monday (NASDAQ:MNDY), H.C. Wainwright adjusted its outlook on Xeris Pharmaceuticals (NASDAQ:XERS) shares, raising the price target to $6.60 from $6.00 while maintaining a Buy rating on the stock.
The adjustment follows Xeris Pharmaceuticals' announcement of its ninth consecutive revenue beat, excluding certain items, and a third revision of its 2024 sales guidance, now set to $198-202 million. Moreover, the company has increased its year-end cash balance forecast to $68-72 million.
The revenue beat was accompanied by a mix of one-time items that affected margins and spending, leading to an operating and bottom line miss. However, when these one-time items were excluded, the company's operating loss was approximately 50% narrower than Wall Street expectations, and net income and earnings per share were about 35% higher than estimated.
Notably, this marks Xeris Pharmaceuticals' first-ever positive adjusted EBITDA, despite not reporting adjusted non-GAAP results like many of its competitors.
The company's growth drivers, Recorlev and Gvoke, exceeded estimates, particularly Recorlev, which brought in $17.7 million, 18% above consensus. Recorlev also displayed a significant year-over-year patient growth increase of 125% in the third quarter, up from 119% in the second quarter.
The company attributes this growth to increased field support and a strong product profile, which are gaining traction in the Cushing's disease market. Furthermore, management has expressed optimism about the fourth quarter referrals and starts.
Gvoke, another of Xeris' products, has shown expected prescription and market share growth during the back-to-school season, suggesting a long-term growth potential, albeit at a slower pace, in the under-penetrated hypoglycemia-at-risk diabetic population.
As for the company's pipeline, Xeris is nearing clarity on its once-weekly levothyroxine autoinjector (XP-8121), which had shown positive Phase 2 data earlier in the year and has completed an End-of-Phase 2 meeting with the FDA this fall. The analyst's updated model now projects sales reaching $280 million by 2030, up from the previous estimate of $245 million.
In other recent news, Xeris Pharmaceuticals has been the subject of an analyst downgrade by Piper Sandler, which shifted the company's rating from Overweight to Neutral, citing a gradual path to significant EBITDA generation.
In the same period, Xeris posted record-breaking Q3 2024 revenue of over $54 million, a 27% increase from the previous year. This marks the company's 12th consecutive quarter of over 20% product revenue growth, largely attributed to its products Recorlev and Gvoke, which contributed nearly $18 million and almost $23 million to the revenue, respectively.
The company revised its 2024 revenue guidance upwards to a range of $198 million to $202 million, reflecting strong confidence in its commercial strategy and financial discipline. Despite these positive developments, Piper Sandler expressed concerns about Xeris Pharmaceuticals' cost structure, perceived as disproportionate to its commercial model.
Looking ahead, Xeris plans to provide detailed guidance for 2025 in March and is focusing on expanding the Recorlev commercial organization while maintaining strong margin profiles. These are recent developments and have been noted by various analyst firms without any further upgrades or downgrades to the company's stock.
InvestingPro Insights
Xeris Pharmaceuticals' recent performance aligns with several key metrics and insights from InvestingPro. The company's market cap stands at $517.31 million, reflecting its growth potential in the pharmaceutical sector. Notably, Xeris has demonstrated strong revenue growth, with a 22.72% increase in the last twelve months as of Q3 2024, reaching $187.36 million. This growth trajectory supports the company's revised 2024 sales guidance mentioned in the article.
InvestingPro Tips highlight that Xeris has shown a significant return over the last week and is trading near its 52-week high, which corroborates the positive sentiment expressed in H.C. Wainwright's raised price target. The stock's strong performance is further evidenced by its impressive 105.93% price total return over the past year.
However, it's important to note that despite the revenue growth and positive market performance, Xeris is not yet profitable over the last twelve months. This aligns with the article's mention of the company achieving its first-ever positive adjusted EBITDA, indicating a potential turning point in its financial trajectory.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Xeris Pharmaceuticals, providing a deeper understanding of the company's financial health and market position.
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