Analysts Are Updating Their urban-gro, Inc. (NASDAQ:UGRO) Estimates After Its Full-Year Results

Last week, you might have seen that urban-gro, Inc. (NASDAQ:UGRO) released its yearly result to the market. The early response was not positive, with shares down 9.1% to US$10.74 in the past week. Revenues of US$62m arrived in line with expectations, although statutory losses per share were US$0.09, an impressive 27% smaller than what broker models predicted. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for urban-gro

Taking into account the latest results, the consensus forecast from urban-gro's two analysts is for revenues of US$111.6m in 2022, which would reflect a substantial 80% improvement in sales compared to the last 12 months. urban-gro is also expected to turn profitable, with statutory earnings of US$0.015 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$93.8m and earnings per share (EPS) of US$0.097 in 2022. Although revenues are expected to increase meaningfully, the analysts have acknowledged the cost of growth, given the pretty serious reduction to EPS estimates following the latest report.

The consensus price target was unchanged at US$18.67, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that urban-gro's rate of growth is expected to accelerate meaningfully, with the forecast 80% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 32% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that urban-gro is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is 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.

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. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

You can also see our analysis of urban-gro's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.