Need To Know: Analysts Just Made A Substantial Cut To Their Rumble Inc. (NASDAQ:RUM) Estimates

Today is shaping up negative for Rumble Inc. (NASDAQ:RUM) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. The stock price has risen 5.1% to US$4.95 over the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

After this downgrade, Rumble's dual analysts are now forecasting revenues of US$160m in 2024. This would be a major 118% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$0.47 per share. However, before this estimates update, the consensus had been expecting revenues of US$231m and US$0.19 per share in losses. 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.

See our latest analysis for Rumble

The consensus price target fell 40% to US$6.00, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

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. It's pretty clear that there is an expectation that Rumble's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 87% growth on an annualised basis. This is compared to a historical growth rate of 447% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% annually. So it's pretty clear that, while Rumble's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for next year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Rumble.

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.

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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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.