Downgrade: Here's How Analysts See Rumble Inc. (NASDAQ:RUM) Performing In The Near Term

One thing we could say about the analysts on Rumble Inc. (NASDAQ:RUM) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the most recent consensus for Rumble from its twin analysts is for revenues of US$93m in 2023 which, if met, would be a sizeable 75% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$0.41 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$103m and losses of US$0.24 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Check out our latest analysis for Rumble

The consensus price target fell 20% to US$12.00, implicitly signalling that lower earnings per share are a leading indicator for Rumble's valuation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Rumble's revenue growth is expected to slow, with the forecast 111% annualised growth rate until the end of 2023 being well below the historical 374% 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 9.7% annually. Even after the forecast slowdown in growth, it seems obvious that Rumble is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Rumble going out as far as 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.