One of the biggest stories of last week was how Allbirds, Inc. (NASDAQ:BIRD) shares plunged 34% in the week since its latest first-quarter results, closing yesterday at US$3.99. It was a pretty bad result overall; while revenues were in line with expectations at US$63m, statutory losses exploded to US$0.15 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the 13 analysts covering Allbirds are now predicting revenues of US$362.4m in 2022. If met, this would reflect a major 25% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 29% to US$0.26. Before this latest report, the consensus had been expecting revenues of US$362.4m and US$0.26 per share in losses.
The analysts trimmed their valuations, with the average price target falling 27% to US$11.00, with the ongoing losses seemingly weighing on sentiment, despite no real changes to the earnings forecasts. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Allbirds analyst has a price target of US$20.00 per share, while the most pessimistic values it at US$6.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
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. The analysts are definitely expecting Allbirds' growth to accelerate, with the forecast 34% annualised growth to the end of 2022 ranking favourably alongside historical growth of 25% per annum 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 9.5% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Allbirds to grow faster 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 estimates - from multiple Allbirds analysts - going out to 2024, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for Allbirds 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.