One Lavoro Limited (NASDAQ:LVRO) Analyst Just Made A Major Cut To Next Year's Estimates

One thing we could say about the covering analyst on Lavoro Limited (NASDAQ:LVRO) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business. Shares are up 8.4% to US$4.41 in the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the downgrade, the consensus from lone analyst covering Lavoro is for revenues of R$6.9b in 2025, implying a sizeable 24% decline in sales compared to the last 12 months. Losses are supposed to balloon 33% to R$10.72 per share. Yet before this consensus update, the analyst had been forecasting revenues of R$9.0b and losses of R$7.69 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for Lavoro

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. One more thing stood out to us about these estimates, and it's the idea that Lavoro's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 31% to the end of 2025. This tops off a historical decline of 3.7% a year over the past year. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.4% annually. So it's pretty clear that, while it does have declining revenues, the analyst also expect Lavoro to suffer worse than 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 Lavoro. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the serious cut to this year's outlook, it's clear that the analyst has turned more bearish on Lavoro, and we wouldn't blame shareholders for feeling a little more cautious themselves.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Lavoro going out as far as 2026, and you can see them 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 backed by insiders.

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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.