CA$1.33: That's What Analysts Think Deveron Corp. (CVE:FARM) Is Worth After Its Latest Results

As you might know, Deveron Corp. (CVE:FARM) last week released its latest third-quarter, and things did not turn out so great for shareholders. It was not a great statutory result, with revenues coming in 31% lower than the analysts predicted. Unsurprisingly, earnings also fell seriously short of forecasts, turning into a per-share loss of CA$0.04. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out the opportunities and risks within the CA Professional Services industry.

After the latest results, the four analysts covering Deveron are now predicting revenues of CA$53.2m in 2023. If met, this would reflect a substantial 191% improvement in sales compared to the last 12 months. Statutory losses are forecast to balloon 81% to CA$0.02 per share. In the lead-up to this report, the analysts had been modelling revenues of CA$53.8m and break-even in 2023. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a EPS estimates.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 8.6% to CA$1.33, with the analysts signalling that growing losses would be a definite concern. 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. Currently, the most bullish analyst values Deveron at CA$1.70 per share, while the most bearish prices it at CA$1.00. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Deveron's rate of growth is expected to accelerate meaningfully, with the forecast 135% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 68% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.6% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Deveron is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still 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 Deveron's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Deveron going out to 2024, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Deveron that you should be aware 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.