Yerbaé Brands Corp. (CVE:YERB.U) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

It's shaping up to be a tough period for Yerbaé Brands Corp. (CVE:YERB.U), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. 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 US$0.07. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Yerbaé Brands

Following the latest results, Yerbaé Brands' three analysts are now forecasting revenues of US$23.7m in 2024. This would be a substantial 99% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 72% to US$0.15. Before this latest report, the consensus had been expecting revenues of US$26.7m and US$0.13 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 average price target fell 8.8% to US$2.58, implicitly signalling that lower earnings per share are a leading indicator for Yerbaé Brands' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Yerbaé Brands at US$3.00 per share, while the most bearish prices it at US$2.00. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Yerbaé Brands' past performance and to peers in the same industry. For example, we noticed that Yerbaé Brands' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 73% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 2.4% a year over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 2.6% annually. Not only are Yerbaé Brands' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Yerbaé Brands. They also downgraded Yerbaé Brands' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Yerbaé Brands analysts - going out to 2025, and you can see them free on our platform here.

Even so, be aware that Yerbaé Brands is showing 3 warning signs in our investment analysis , and 1 of those can't be ignored...

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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.