Bearish: Analysts Just Cut Their Spire Global, Inc. (NYSE:SPIR) Revenue and EPS estimates

Market forces rained on the parade of Spire Global, Inc. (NYSE:SPIR) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After this downgrade, Spire Global's five analysts are now forecasting revenues of US$125m in 2024. This would be a meaningful 16% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 23% to US$2.27. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$142m and losses of US$1.59 per share in 2024. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for Spire Global

The consensus price target fell 14% to US$17.80, implicitly signalling that lower earnings per share are a leading indicator for Spire Global's valuation.

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 pretty clear that there is an expectation that Spire Global's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 22% growth on an annualised basis. This is compared to a historical growth rate of 41% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.7% per year. Even after the forecast slowdown in growth, it seems obvious that Spire Global is also expected to grow faster than the wider 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. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Spire Global.

There might be good reason for analyst bearishness towards Spire Global, like dilutive stock issuance over the past year. Learn more, and discover the 2 other concerns we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.