Market forces rained on the parade of Stryve Foods, Inc. (NASDAQ:SNAX) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
After this downgrade, Stryve Foods' three analysts are now forecasting revenues of US$36m in 2022. This would be a meaningful 16% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 37% to US$1.12. Yet before this consensus update, the analysts had been forecasting revenues of US$44m and losses of US$1.04 per share in 2022. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
The consensus price target fell 6.3% to US$2.50, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Stryve Foods analyst has a price target of US$3.00 per share, while the most pessimistic values it at US$2.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Stryve Foods shareholders.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Stryve Foods' revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 34% growth on an annualised basis. This is compared to a historical growth rate of 57% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.6% per year. Even after the forecast slowdown in growth, it seems obvious that Stryve Foods is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Stryve Foods going forwards.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Stryve Foods analysts - going out to 2023, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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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.
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