Deliveroo plc (LON:ROO) Yearly Results Just Came Out: Here's What Analysts Are Forecasting For This Year

It's been a pretty great week for Deliveroo plc (LON:ROO) shareholders, with its shares surging 16% to UK£1.29 in the week since its latest annual results. The statutory results were not great - while revenues of UK£1.8b were in line with expectations,Deliveroo lost UK£0.18 a share in the process. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Deliveroo

Taking into account the latest results, the consensus forecast from Deliveroo's twelve analysts is for revenues of UK£2.28b in 2022, which would reflect a substantial 25% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 48% to UK£0.086. Yet prior to the latest earnings, the analysts had been forecasting revenues of UK£2.28b and losses of UK£0.11 per share in 2022. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading revenues and making a very promising decrease in losses per share in particular.

There's been no major changes to the consensus price target of UK£2.78, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's 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 Deliveroo at UK£4.35 per share, while the most bearish prices it at UK£1.70. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. We would highlight that Deliveroo's revenue growth is expected to slow, with the forecast 25% annualised growth rate until the end of 2022 being well below the historical 36% 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 15% annually. Even after the forecast slowdown in growth, it seems obvious that Deliveroo is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Deliveroo. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Deliveroo analysts - going out to 2024, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Deliveroo that you should be aware of.

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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.