On Wednesday, Piper Sandler adjusted its price target for Exelixis (NASDAQ:EXEL), increasing it to $36.00 from the previous $33.00 while maintaining an Overweight rating on the stock. The revision follows Exelixis's third-quarter earnings report, which showcased a significant top and bottom-line beat.
Exelixis reported total revenues of $539.5 million, surpassing both Piper Sandler's and consensus estimates, largely due to the performance of its cancer drug, cabozantinib (cabo). The company's non-GAAP earnings per share (EPS) of $0.47 also exceeded the expectations of $0.42 from Piper Sandler and $0.34 from the consensus.
The company has updated its revenue guidance, indicating potential peak cabo revenues in the United States to reach approximately $3 billion by 2030. Additionally, U.S. revenues for zanzaline (zanza) are projected to hit around $5 billion by 2033. These figures notably surpass current model assumptions and investor expectations.
The analyst from Piper Sandler highlighted that the updated revenue guidance for zanza is particularly significant as it exceeds what investors had anticipated. The sentiment towards Exelixis could shift as Phase III data for zanza is expected to be released starting in 2025. Despite the future prospects of zanza, the increased price target is primarily attributed to the strong third-quarter performance of cabo and the revised guidance.
In summary, Piper Sandler's new price target reflects a positive outlook for Exelixis, underpinned by a robust base business with cabozantinib and the potential for significant upside from zanzaline in the years to come.
InvestingPro Insights
Exelixis's strong financial performance, as highlighted in the article, is further supported by real-time data from InvestingPro. The company's revenue growth of 35.61% in Q2 2024 aligns with the impressive top-line beat mentioned in the earnings report. Additionally, the EBITDA growth of 159.1% over the last twelve months as of Q2 2024 underscores the company's robust financial health.
InvestingPro Tips reveal that Exelixis holds more cash than debt on its balance sheet, indicating a strong financial position that could support its ambitious revenue projections for cabozantinib and zanzaline. The company's high shareholder yield and management's aggressive share buybacks suggest a commitment to returning value to investors, which may contribute to the positive sentiment reflected in Piper Sandler's upgraded price target.
It's worth noting that Exelixis is trading near its 52-week high, with a strong return of 23.46% over the last three months. This performance aligns with the optimistic outlook presented in the article. For investors seeking more comprehensive analysis, InvestingPro offers 11 additional tips for Exelixis, providing a deeper understanding of the company's financial landscape and potential.
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