Newsflash: ZipRecruiter, Inc. (NYSE:ZIP) Analysts Have Been Trimming Their Revenue Forecasts

One thing we could say about the analysts on ZipRecruiter, Inc. (NYSE:ZIP) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the six analysts covering ZipRecruiter provided consensus estimates of US$579m revenue in 2024, which would reflect a not inconsiderable 20% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to nosedive 51% to US$0.31 in the same period. Before this latest update, the analysts had been forecasting revenues of US$645m and earnings per share (EPS) of US$0.32 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a measurable cut to revenue estimates and a minor downgrade to EPS estimates to boot.

View our latest analysis for ZipRecruiter

The consensus price target fell 8.8% to US$14.60, with the weaker earnings outlook clearly leading analyst valuation estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ZipRecruiter's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 16% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 21% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 10% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - ZipRecruiter is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of ZipRecruiter's future valuation. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on ZipRecruiter after today.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with ZipRecruiter's financials, such as a weak balance sheet. For more information, you can click here to discover this and the 2 other warning signs we've identified.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.