One Analyst Just Shaved Their Eastside Distilling, Inc. (NASDAQ:EAST) Forecasts Dramatically

Market forces rained on the parade of Eastside Distilling, Inc. (NASDAQ:EAST) shareholders today, when the covering analyst downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

Following the downgrade, the most recent consensus for Eastside Distilling from its sole analyst is for revenues of US$12m in 2023 which, if met, would be a meaningful 12% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 50% to US$7.09 per share. Yet prior to the latest estimates, the analyst had been forecasting revenues of US$20m and losses of US$4.13 per share in 2023. Ergo, there's been a clear change in sentiment, with the analyst administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out our latest analysis for Eastside Distilling

The consensus price target fell 72% to US$5.00, implicitly signalling that lower earnings per share are a leading indicator for Eastside Distilling's valuation.

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. It's clear from the latest estimates that Eastside Distilling's rate of growth is expected to accelerate meaningfully, with the forecast 27% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 13% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Eastside Distilling to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst increased their loss per share estimates for this year. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Eastside Distilling.

That said, this analyst might have good reason to be negative on Eastside Distilling, given dilutive stock issuance over the past year. For more information, you can click here to discover this and the 2 other risks we've identified.

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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