Soho House & Co Inc. (NYSE:SHCO) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

As you might know, Soho House & Co Inc. (NYSE:SHCO) recently reported its full-year numbers. It was a pretty bad result overall; while revenues were in line with expectations at US$1.1b, statutory losses exploded to US$0.60 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Soho House & Co after the latest results.

View our latest analysis for Soho House & Co

After the latest results, the five analysts covering Soho House & Co are now predicting revenues of US$1.22b in 2024. If met, this would reflect an okay 7.7% improvement in revenue compared to the last 12 months. Losses are supposed to decline, shrinking 20% from last year to US$0.48. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.30b and losses of US$0.23 per share in 2024. While this year's revenue estimates dropped there was also a massive increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The consensus price target fell 11% to US$8.10, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Soho House & Co, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$6.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Soho House & Co shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Soho House & Co's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Soho House & Co's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.7% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.8% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Soho House & Co.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Soho House & Co. On the negative side, they also downgraded their revenue estimates, and 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 Soho House & Co 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 Soho House & Co (1 is a bit unpleasant!) 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.