Wheels Up Experience Inc. (NYSE:UP) Just Reported First-Quarter Earnings And Analysts Are Lifting Their Estimates

Wheels Up Experience Inc. (NYSE:UP) just released its quarterly report and things are looking bullish. Results overall were credible, with revenues arriving 8.2% better than analyst forecasts at US$326m. Higher revenues also resulted in lower statutory losses, which were US$0.36 per share, some 8.2% smaller than the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Wheels Up Experience after the latest results.

View our latest analysis for Wheels Up Experience

Following the latest results, Wheels Up Experience's seven analysts are now forecasting revenues of US$1.50b in 2022. This would be a solid 19% improvement in sales compared to the last 12 months. Losses are forecast to balloon 26% to US$1.28 per share. Before this latest report, the consensus had been expecting revenues of US$1.40b and US$1.29 per share in losses.

The consensus price target fell 16% to US$5.40as the analysts signal that ongoing losses are likely to weigh on the stock price. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Wheels Up Experience analyst has a price target of US$8.00 per share, while the most pessimistic values it at US$2.40. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. 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 Wheels Up Experience's revenue growth is expected to slow, with the forecast 26% annualised growth rate until the end of 2022 being well below the historical 57% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% per year. Even after the forecast slowdown in growth, it seems obvious that Wheels Up Experience is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Wheels Up Experience's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Wheels Up Experience going out to 2024, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 2 warning signs for Wheels Up Experience that you need to be mindful 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.