Wishpond Technologies Ltd. (CVE:WISH) Just Reported, And Analysts Assigned A CA$1.92 Price Target

Shareholders of Wishpond Technologies Ltd. (CVE:WISH) will be pleased this week, given that the stock price is up 19% to CA$0.86 following its latest quarterly results. It looks like a positive result overall, with revenues of CA$5.0m beating forecasts by 5.8%. Statutory losses of CA$0.02 per share were roughly in line with what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Wishpond Technologies

Taking into account the latest results, the current consensus from Wishpond Technologies' five analysts is for revenues of CA$20.5m in 2022, which would reflect a decent 16% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 43% to CA$0.045. Yet prior to the latest earnings, the analysts had been forecasting revenues of CA$20.8m and losses of CA$0.05 per share in 2022. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading revenues and making a favorable reduction in losses per share in particular.

The consensus price target fell 5.4% to CA$1.92despite the forecast for smaller losses next year. It looks like the ongoing lack of profitability is starting to weigh on valuations. 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. There are some variant perceptions on Wishpond Technologies, with the most bullish analyst valuing it at CA$2.75 and the most bearish at CA$0.90 per share. This is a fairly broad spread of estimates, suggesting that 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. It's pretty clear that there is an expectation that Wishpond Technologies' revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 34% growth on an annualised basis. This is compared to a historical growth rate of 69% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 19% annually. So it's pretty clear that, while Wishpond Technologies' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Wishpond Technologies' future valuation.

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. We have forecasts for Wishpond Technologies going out to 2024, and you can see them free on our platform here.

Even so, be aware that Wishpond Technologies is showing 2 warning signs in our investment analysis , you should know about...

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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.