Earnings Update: Here's Why Analysts Just Lifted Their Weave Communications, Inc. (NYSE:WEAV) Price Target To US$14.86

It's been a mediocre week for Weave Communications, Inc. (NYSE:WEAV) shareholders, with the stock dropping 15% to US$10.64 in the week since its latest annual results. The results look positive overall; while revenues of US$170m were in line with analyst predictions, statutory losses were 3.4% smaller than expected, with Weave Communications losing US$0.46 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Weave Communications after the latest results.

Check out our latest analysis for Weave Communications

Taking into account the latest results, the current consensus from Weave Communications' seven analysts is for revenues of US$196.3m in 2024. This would reflect a decent 15% increase on its revenue over the past 12 months. Losses are forecast to narrow 9.2% to US$0.40 per share. Before this earnings announcement, the analysts had been modelling revenues of US$194.6m and losses of US$0.44 per share in 2024. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.

The average price target rose 13% to US$14.86, with the analysts signalling that the forecast reduction in losses would be a positive for the stock's valuation. 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 Weave Communications analyst has a price target of US$18.00 per share, while the most pessimistic values it at US$12.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. We would highlight that Weave Communications' revenue growth is expected to slow, with the forecast 15% annualised growth rate until the end of 2024 being well below the historical 23% p.a. growth over the last three years. Compare this to the 437 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 12% per year. Factoring in the forecast slowdown in growth, it looks like Weave Communications is forecast to grow at about the same rate as 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Weave Communications going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Weave Communications that we have uncovered.

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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.