Analysts Just Shaved Their Lightning eMotors, Inc. (NYSE:ZEV) Forecasts Dramatically

Today is shaping up negative for Lightning eMotors, Inc. (NYSE:ZEV) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

After this downgrade, Lightning eMotors' five analysts are now forecasting revenues of US$79m in 2022. This would be a major 274% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 33% to US$0.89. However, before this estimates update, the consensus had been expecting revenues of US$124m and US$0.59 per share in losses. 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.

Check out our latest analysis for Lightning eMotors

The consensus price target fell 12% to US$9.90, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Lightning eMotors' growth to accelerate, with the forecast 274% annualised growth to the end of 2022 ranking favourably alongside historical growth of 63% per annum 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 7.2% 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 take away is that analysts increased their loss per share estimates for this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Lightning eMotors 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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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.