Analysts Have Lowered Expectations For Lightning eMotors, Inc. (NYSE:ZEV) After Its Latest Results

Investors in Lightning eMotors, Inc. (NYSE:ZEV) had a good week, as its shares rose 2.1% to close at US$5.82 following the release of its yearly results. The results weren't stellar - revenue fell 5.0% short of analyst estimates at US$21m, although statutory losses were a relative bright spot. The per-share loss was US$1.67, 18% smaller than the analysts were expecting prior to the result. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Lightning eMotors

Following the latest results, Lightning eMotors' five analysts are now forecasting revenues of US$83.9m in 2022. This would be a huge 300% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 38% to US$0.83. Before this latest report, the consensus had been expecting revenues of US$123.6m and US$0.59 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.

The average price target fell 12% to US$9.90, implicitly signalling that lower earnings per share are a leading indicator for Lightning eMotors' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Lightning eMotors at US$15.00 per share, while the most bearish prices it at US$5.50. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 Lightning eMotors' rate of growth is expected to accelerate meaningfully, with the forecast 300% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 63% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Lightning eMotors 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Lightning eMotors' future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Lightning eMotors going out to 2024, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Lightning eMotors that we have uncovered.

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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.