Analysts Have Lowered Expectations For Sharecare, Inc. (NASDAQ:SHCR) After Its Latest Results

Shareholders in Sharecare, Inc. (NASDAQ:SHCR) had a terrible week, as shares crashed 24% to US$2.54 in the week since its latest yearly results. Revenues of US$413m arrived in line with expectations, although statutory losses per share were US$0.30, an impressive 49% smaller than what broker models predicted. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Sharecare

Taking into account the latest results, the consensus forecast from Sharecare's three analysts is for revenues of US$477.2m in 2022, which would reflect a notable 16% improvement in sales compared to the last 12 months. Statutory losses are forecast to balloon 90% to US$0.025 per share. In the lead-up to this report, the analysts had been modelling revenues of US$539.6m and earnings per share (EPS) of US$0.045 in 2022. So we can see that the consensus has become notably more bearish on Sharecare's outlook following these results, with a real cut to next year's revenue estimates. Furthermore, they expect the business to be loss-making next year, compared to their previous calls for a profit.

The consensus price target fell 37% to US$6.67, 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 Sharecare, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$4.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sharecare's past performance and to peers in the same industry. It's clear from the latest estimates that Sharecare's rate of growth is expected to accelerate meaningfully, with the forecast 16% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 5.0% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Sharecare is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest low-light for us was that the forecasts for Sharecare dropped from profits to a loss next year. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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 Sharecare'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. At Simply Wall St, we have a full range of analyst estimates for Sharecare going out to 2024, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Sharecare , and understanding it should be part of your investment process.

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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.