Analysts Have Been Trimming Their Aterian, Inc. (NASDAQ:ATER) Price Target After Its Latest Report

Last week, you might have seen that Aterian, Inc. (NASDAQ:ATER) released its third-quarter result to the market. The early response was not positive, with shares down 7.1% to US$2.76 in the past week. Revenues of US$26m arrived in line with expectations, although statutory losses per share were US$0.25, an impressive 54% smaller than what broker models predicted. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Aterian

After the latest results, the consensus from Aterian's three analysts is for revenues of US$103.1m in 2025, which would reflect a measurable 3.9% decline in revenue compared to the last year of performance. Losses are predicted to fall substantially, shrinking 33% to US$1.71. Before this earnings announcement, the analysts had been modelling revenues of US$103.5m and losses of US$2.24 per share in 2025. Although the revenue estimates have not really changed Aterian'sfuture looks a little different to the past, with a very promising decrease in the loss per share forecasts in particular.

Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 43% to US$8.50. It looks likethe analysts have become less optimistic about the overall business. 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. The most optimistic Aterian analyst has a price target of US$12.00 per share, while the most pessimistic values it at US$5.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 3.1% annualised decline to the end of 2025. That is a notable change from historical growth of 0.1% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.8% per year. It's pretty clear that Aterian's revenues are expected to perform substantially worse 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 Aterian going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 4 warning signs for Aterian that you should be aware of.

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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.