Analysts Have Just Cut Their Lightning eMotors, Inc. (NYSE:ZEV) Revenue Estimates By 20%

Market forces rained on the parade of Lightning eMotors, Inc. (NYSE:ZEV) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. Bidders are definitely seeing a different story, with the stock price of US$4.34 reflecting a 30% rise in the past week. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.

Following the downgrade, the most recent consensus for Lightning eMotors from its four analysts is for revenues of US$61m in 2022 which, if met, would be a huge 181% increase on its sales over the past 12 months. Losses are presumed to reduce, shrinking 11% from last year to US$1.00. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$76m and losses of US$0.93 per share in 2022. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

See our latest analysis for Lightning eMotors

There was no major change to the consensus price target of US$10.25, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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 Lightning eMotors analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$5.50. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

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. It's clear from the latest estimates that Lightning eMotors' rate of growth is expected to accelerate meaningfully, with the forecast 297% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 68% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Lightning eMotors is expected to grow much faster than its 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 Lightning eMotors. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Lightning eMotors after today.

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 Lightning eMotors analysts - going out to 2024, 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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