Wag! Group Co. (NASDAQ:PET) Just Reported Yearly Earnings And Analysts Are Lifting Their Estimates

Wag! Group Co. (NASDAQ:PET) just released its latest yearly results and things are looking bullish. Results overall were credible, with revenues arriving 6.4% better than analyst forecasts at US$55m. Higher revenues also resulted in lower statutory losses, which were US$2.07 per share, some 6.4% smaller than the analysts expected. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Wag! Group

Taking into account the latest results, the most recent consensus for Wag! Group from five analysts is for revenues of US$76.5m in 2023 which, if met, would be a substantial 39% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 78% to US$0.23. Before this latest report, the consensus had been expecting revenues of US$70.2m and US$0.67 per share in losses. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a considerable decrease in loss per share in particular.

The consensus price target rose 6.3% to US$6.70, with the analysts encouraged by the higher revenue and lower forecast losses for next year. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Wag! Group analyst has a price target of US$8.00 per share, while the most pessimistic values it at US$5.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. We would highlight that Wag! Group's revenue growth is expected to slow, with the forecast 39% annualised growth rate until the end of 2023 being well below the historical 173% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.0% annually. Even after the forecast slowdown in growth, it seems obvious that Wag! Group is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Wag! Group going out to 2025, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 3 warning signs for Wag! Group (1 doesn't sit too well with us!) that you need to be mindful 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.