Xos, Inc. (NASDAQ:XOS) Analysts Are Cutting Their Estimates: Here's What You Need To Know

Xos, Inc. (NASDAQ:XOS) just released its latest first-quarter report and things are not looking great. It was not a great result overall, as revenues of US$4.7m fell 48% short of analyst expectations. Unsurprisingly, statutory losses ended up being14% larger than the analysts expected, at US$0.14 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Xos

Taking into account the latest results, the consensus forecast from Xos' five analysts is for revenues of US$71.1m in 2023, which would reflect a sizeable 109% improvement in sales compared to the last 12 months. Losses are forecast to narrow 3.1% to US$0.42 per share. Before this earnings announcement, the analysts had been modelling revenues of US$85.4m and losses of US$0.42 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also making no real change to the loss per share numbers.

The consensus price target rose 35% to US$2.53, seeming to imply that weaker revenue sentiment is not expected to have a major impact on the company's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Xos analyst has a price target of US$4.00 per share, while the most pessimistic values it at US$0.60. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 167% growth on an annualised basis. That is in line with its 202% annual growth over the past year. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.9% annually. So although Xos 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 reconfirmed their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Xos analysts - going out to 2025, and you can see them free on our platform here.

Plus, you should also learn about the 5 warning signs we've spotted with Xos (including 1 which is a bit unpleasant) .

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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.