LuxUrban Hotels Inc. Just Reported A Surprise Loss: Here's What Analysts Think Will Happen Next

It's been a good week for LuxUrban Hotels Inc. (NASDAQ:LUXH) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.1% to US$2.94. Revenues of US$23m beat expectations by 2.2%. Unfortunately statutory earnings per share (EPS) fell well short of the mark, turning in a loss of US$0.10 compared to previous analyst expectations of a profit. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for LuxUrban Hotels

Taking into account the latest results, the consensus forecast from LuxUrban Hotels' three analysts is for revenues of US$124.0m in 2023, which would reflect a huge 116% improvement in sales compared to the last 12 months. Earnings are expected to improve, with LuxUrban Hotels forecast to report a statutory profit of US$0.34 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$123.5m and earnings per share (EPS) of US$0.39 in 2023. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

Despite cutting their earnings forecasts,the analysts have lifted their price target 19% to US$8.33, suggesting that these impacts are not expected to weigh on the stock's value in the long term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic LuxUrban Hotels analyst has a price target of US$10.00 per share, while the most pessimistic values it at US$7.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 clear from the latest estimates that LuxUrban Hotels' rate of growth is expected to accelerate meaningfully, with the forecast 178% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 82% over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.1% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect LuxUrban Hotels to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on LuxUrban Hotels. Long-term earnings power is much more important than next year's profits. We have forecasts for LuxUrban Hotels going out to 2024, and you can see them free on our platform here.

Even so, be aware that LuxUrban Hotels is showing 5 warning signs in our investment analysis , and 2 of those are potentially serious...

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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.