The Lion Electric Company (TSE:LEV) Analysts Are Cutting Their Estimates: Here's What You Need To Know

The Lion Electric Company (TSE:LEV) investors will be delighted, with the company turning in some strong numbers with its latest results. The results were impressive, with revenues of US$58m exceeding analyst forecasts by 21%, and statutory losses of US$0.27 were likewise much smaller than the analysts had forecast. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Lion Electric

Taking into account the latest results, the consensus forecast from Lion Electric's seven analysts is for revenues of US$215.3m in 2022, which would reflect a major 273% improvement in sales compared to the last 12 months. Losses are forecast to balloon 84% to US$0.42 per share. Before this latest report, the consensus had been expecting revenues of US$268.1m and US$0.34 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.

The consensus price target fell 7.2% to CA$22.90, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Lion Electric, with the most bullish analyst valuing it at CA$28.03 and the most bearish at CA$19.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Lion Electric's growth to accelerate, with the forecast 273% annualised growth to the end of 2022 ranking favourably alongside historical growth of 33% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 23% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Lion Electric to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also downgraded their revenue estimates, although industry data suggests that Lion Electric's revenues are 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 Lion Electric'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. We have estimates - from multiple Lion Electric analysts - going out to 2024, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Lion Electric you should be aware of, and 1 of them is a bit unpleasant.

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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.