Goodfood Market Corp. Just Reported A Surprise Profit And Analysts Updated Their Estimates

Investors in Goodfood Market Corp. (TSE:FOOD) had a good week, as its shares rose 9.8% to close at CA$0.34 following the release of its quarterly results. It looks like a credible result overall - although revenues of CA$40m were what the analysts expected, Goodfood Market surprised by delivering a statutory profit of CA$0.02 per share, instead of the previously forecast loss. 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.

View our latest analysis for Goodfood Market

Following last week's earnings report, Goodfood Market's two analysts are forecasting 2024 revenues to be CA$156.6m, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 22% to CA$0.055. Before this earnings announcement, the analysts had been modelling revenues of CA$163.5m and losses of CA$0.15 per share in 2024. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a very promising decrease in losses per share in particular.

The analysts have cut their price target 8.0% to CA$0.57per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.8% by the end of 2024. This indicates a significant reduction from annual growth of 1.0% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Goodfood Market is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Goodfood Market (1 doesn't sit too well with us!) that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.