What Does The Future Hold For Gogoro Inc. (NASDAQ:GGR)? These Analysts Have Been Cutting Their Estimates

The latest analyst coverage could presage a bad day for Gogoro Inc. (NASDAQ:GGR), 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 the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Investors however, have been notably more optimistic about Gogoro recently, with the stock price up a noteworthy 12% to US$2.66 in the past week. With such a sharp increase, it seems brokers may have seen something that is not yet being priced in by the wider market.

Following the downgrade, the consensus from three analysts covering Gogoro is for revenues of US$345m in 2023, implying a noticeable 2.5% decline in sales compared to the last 12 months. Losses are supposed to balloon 26% to US$0.32 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$389m and losses of US$0.31 per share in 2023. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out our latest analysis for Gogoro

The consensus price target fell 16% to US$3.77, implicitly signalling that lower earnings per share are a leading indicator for Gogoro's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 2.5% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 2.6% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 17% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Gogoro is expected to lag the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Gogoro. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Gogoro's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Gogoro going forwards.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Gogoro analysts - going out to 2025, 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.

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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.