Earnings Update: Wag! Group Co. (NASDAQ:PET) Just Reported Its First-Quarter Results And Analysts Are Updating Their Forecasts

It's been a good week for Wag! Group Co. (NASDAQ:PET) shareholders, because the company has just released its latest first-quarter results, and the shares gained 5.3% to US$2.39. The statutory results were mixed overall, with revenues of US$23m in line with analyst forecasts, but losses of US$0.11 per share, some 7.3% larger than the analysts were predicting. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Wag! Group

Taking into account the latest results, the most recent consensus for Wag! Group from four analysts is for revenues of US$108.9m in 2024. If met, it would imply a major 26% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 30% to US$0.24. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$108.8m and losses of US$0.13 per share in 2024. So it's pretty clear the analysts have mixed opinions on Wag! Group even after this update; although they reconfirmed their revenue numbers, it came at the cost of a very substantial increase in per-share losses.

The consensus price target held steady at US$5.88, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company'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. Currently, the most bullish analyst values Wag! Group at US$8.00 per share, while the most bearish prices it at US$4.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 36% growth on an annualised basis. That is in line with its 31% annual growth over the past year. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 11% annually. So it's pretty clear that Wag! Group is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Wag! Group. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Wag! Group 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 Wag! Group (1 is significant) 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.