Analysts Have Lowered Expectations For 1stdibs.Com, Inc. (NASDAQ:DIBS) After Its Latest Results

By
Simply Wall St
Published
May 14, 2022
NasdaqGM:DIBS
Source: Shutterstock

There's been a major selloff in 1stdibs.Com, Inc. (NASDAQ:DIBS) shares in the week since it released its first-quarter report, with the stock down 21% to US$5.44. It was a respectable set of results; while revenues of US$27m were in line with analyst predictions, statutory losses were 11% smaller than expected, with 1stdibs.Com losing US$0.17 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for 1stdibs.Com

earnings-and-revenue-growth
NasdaqGM:DIBS Earnings and Revenue Growth May 14th 2022

Taking into account the latest results, 1stdibs.Com's four analysts currently expect revenues in 2022 to be US$102.8m, approximately in line with the last 12 months. Per-share losses are predicted to creep up to US$0.81. Before this earnings announcement, the analysts had been modelling revenues of US$114.7m and losses of US$0.71 per share in 2022. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.

The consensus price target fell 31% to US$11.50, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values 1stdibs.Com at US$18.00 per share, while the most bearish prices it at US$7.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 1.3% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 16% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 14% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - 1stdibs.Com is expected to lag the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at 1stdibs.Com. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for 1stdibs.Com going out to 2023, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 2 warning signs for 1stdibs.Com that you should be aware of.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.