PLBY Group, Inc. (NASDAQ:PLBY) Analysts Are Reducing Their Forecasts For This Year

One thing we could say about the analysts on PLBY Group, Inc. (NASDAQ:PLBY) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. 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.

Following the downgrade, the most recent consensus for PLBY Group from its six analysts is for revenues of US$301m in 2022 which, if met, would be a reasonable 4.1% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 89% to US$0.17. Prior to this update, the analysts had been forecasting revenues of US$349m and earnings per share (EPS) of US$0.29 in 2022. There looks to have been a major change in sentiment regarding PLBY Group's prospects, with a substantial drop in revenues and the analysts now forecasting a loss instead of a profit.

View our latest analysis for PLBY Group

The consensus price target fell 46% to US$9.83, implicitly signalling that lower earnings per share are a leading indicator for PLBY Group's 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. There are some variant perceptions on PLBY Group, with the most bullish analyst valuing it at US$30.00 and the most bearish at US$7.00 per share. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that PLBY Group's revenue growth is expected to slow, with the forecast 8.4% annualised growth rate until the end of 2022 being well below the historical 66% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.3% annually. Factoring in the forecast slowdown in growth, it looks like PLBY Group is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for PLBY Group dropped from profits to a loss this year. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of PLBY Group.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple PLBY Group analysts - 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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