Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) shareholders are probably feeling a little disappointed, since its shares fell 9.6% to US$19.70 in the week after its latest annual results. It looks like a credible result overall - although revenues of US$179m were what the analysts expected, Rigel Pharmaceuticals surprised by delivering a (statutory) profit of US$0.99 per share, an impressive 127% above what was forecast. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Rigel Pharmaceuticals

Following the latest results, Rigel Pharmaceuticals' six analysts are now forecasting revenues of US$197.8m in 2025. This would be a decent 10% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 18% to US$1.16. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$204.9m and earnings per share (EPS) of US$1.28 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

What's most unexpected is that the consensus price target rose 5.2% to US$33.67, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Rigel Pharmaceuticals analyst has a price target of US$57.00 per share, while the most pessimistic values it at US$20.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Rigel Pharmaceuticals' rate of growth is expected to accelerate meaningfully, with the forecast 10% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 8.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 20% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Rigel Pharmaceuticals is expected to grow slower than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Rigel Pharmaceuticals. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Rigel 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 Rigel Pharmaceuticals going out to 2027, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 3 warning signs for Rigel Pharmaceuticals that you should be aware of.

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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.