Analysts Have Just Cut Their Goodfood Market Corp. (TSE:FOOD) Revenue Estimates By 12%

The latest analyst coverage could presage a bad day for Goodfood Market Corp. (TSE:FOOD), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the latest consensus from Goodfood Market's nine analysts is for revenues of CA$392m in 2022, which would reflect a modest 3.5% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing CA$444m of revenue in 2022. The consensus view seems to have become more pessimistic on Goodfood Market, noting the measurable cut to revenue estimates in this update.

See our latest analysis for Goodfood Market

The consensus price target fell 43% to CA$6.81, with the analysts clearly less optimistic about Goodfood Market's valuation following this update. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Goodfood Market analyst has a price target of CA$9.00 per share, while the most pessimistic values it at CA$6.00. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Goodfood Market's revenue growth is expected to slow, with the forecast 3.5% annualised growth rate until the end of 2022 being well below the historical 56% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 16% per year. Factoring in the forecast slowdown in growth, it seems obvious that Goodfood Market is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also anticipating slower revenue growth than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given the stark change in sentiment, we'd understand if investors became more cautious on Goodfood Market after today.

Thirsting for more data? We have estimates for Goodfood Market from its nine analysts out until 2023, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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.

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