Stock Analysis

US$12.39: That's What Analysts Think Zevia PBC (NYSE:ZVIA) Is Worth After Its Latest Results

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NYSE:ZVIA
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There's been a major selloff in Zevia PBC (NYSE:ZVIA) shares in the week since it released its yearly report, with the stock down 29% to US$6.73. It looks like the results were pretty good overall. While revenues of US$138m were in line with analyst predictions, statutory losses were much smaller than expected, with Zevia PBC losing US$1.33 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Zevia PBC

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NYSE:ZVIA Earnings and Revenue Growth February 27th 2022

Taking into account the latest results, the consensus forecast from Zevia PBC's eight analysts is for revenues of US$178.5m in 2022, which would reflect a sizeable 29% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 14% from last year to US$0.61. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$178.7m and losses of US$0.35 per share in 2022. So it's pretty clear the analysts have mixed opinions on Zevia PBC even after this update; although they reconfirmed their revenue numbers, it came at the cost of a regrettable increase in per-share losses.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 9.9% to US$12.39, with the analysts signalling that growing losses would be a definite concern. 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 Zevia PBC, with the most bullish analyst valuing it at US$18.00 and the most bearish at US$7.00 per share. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 29% growth on an annualised basis. That is in line with its 26% annual growth over the past year. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.3% annually. So although Zevia PBC is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider 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 Zevia PBC. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Zevia PBC's future valuation.

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 Zevia PBC going out to 2024, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Zevia PBC you should know about.

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