The Charlotte's Web Holdings, Inc. (TSE:CWEB) Analysts Have Been Trimming Their Sales Forecasts

The analysts covering Charlotte's Web Holdings, Inc. (TSE:CWEB) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the current consensus from Charlotte's Web Holdings' six analysts is for revenues of US$116m in 2021 which - if met - would reflect a notable 19% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$129m in 2021. It looks like forecasts have become a fair bit less optimistic on Charlotte's Web Holdings, given the measurable cut to revenue estimates.

Check out our latest analysis for Charlotte's Web Holdings

There was no particular change to the consensus price target of US$5.19, with Charlotte's Web Holdings' latest outlook seemingly not enough to result in a change of valuation. 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. The most optimistic Charlotte's Web Holdings analyst has a price target of US$8.00 per share, while the most pessimistic values it at US$4.73. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Charlotte's Web Holdings' growth to accelerate, with the forecast 26% annualised growth to the end of 2021 ranking favourably alongside historical growth of 20% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 36% per year. So it's clear that despite the acceleration in growth, Charlotte's Web Holdings is expected to grow meaningfully slower than the industry average.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Charlotte's Web Holdings this year. They also expect company revenue to perform worse than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Charlotte's Web Holdings after today.

Want more information? At least one of Charlotte's Web Holdings' six analysts has provided estimates out to 2022, which can be seen for 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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