urban-gro, Inc. (NASDAQ:UGRO) First-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year

Investors in urban-gro, Inc. (NASDAQ:UGRO) had a good week, as its shares rose 5.5% to close at US$1.93 following the release of its quarterly results. The results were mixed overall, with revenues slightly ahead of analyst estimates at US$16m. Statutory losses by contrast were 5.9% larger than predictions at US$0.18 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for urban-gro

Following the latest results, urban-gro's four analysts are now forecasting revenues of US$82.0m in 2024. This would be a meaningful 17% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 64% to US$0.46. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$81.8m and losses of US$0.43 per share in 2024. So it's pretty clear consensus is mixed on urban-gro after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a modest increase to per-share loss expectations.

The consensus price target held steady at US$4.64, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic urban-gro analyst has a price target of US$8.00 per share, while the most pessimistic values it at US$3.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 23% growth on an annualised basis. That is in line with its 27% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 3.6% annually. So although urban-gro is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased 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 urban-gro. Long-term earnings power is much more important than next year's profits. We have forecasts for urban-gro going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 5 warning signs for urban-gro (1 is a bit concerning!) that you need to take into consideration.

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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.