Analysts Just Made A Major Revision To Their Tidewater Renewables Ltd. (TSE:LCFS) Revenue Forecasts

Today is shaping up negative for Tidewater Renewables Ltd. (TSE:LCFS) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. At CA$8.73, shares are up 4.9% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the downgrade, the most recent consensus for Tidewater Renewables from its six analysts is for revenues of CA$145m in 2023 which, if met, would be a sizeable 101% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 45% to CA$0.23 per share. Previously, the analysts had been modelling revenues of CA$199m and earnings per share (EPS) of CA$0.0017 in 2023. So we can see that the consensus has become notably more bearish on Tidewater Renewables' outlook with these numbers, making a sizeable cut to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

View our latest analysis for Tidewater Renewables

The consensus price target was broadly unchanged at CA$15.19, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation.

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. The analysts are definitely expecting Tidewater Renewables' growth to accelerate, with the forecast 3x annualised growth to the end of 2023 ranking favourably alongside historical growth of 6.0% per annum over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 2.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Tidewater Renewables to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts are expecting Tidewater Renewables to become unprofitable this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Tidewater Renewables going forwards.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Tidewater Renewables analysts - going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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