RumbleOn, Inc. (NASDAQ:RMBL) Analysts Just Slashed This Year's Revenue Estimates By 10%

Market forces rained on the parade of RumbleOn, Inc. (NASDAQ:RMBL) shareholders today, when the analysts downgraded their forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the current consensus, from the four analysts covering RumbleOn, is for revenues of US$1.2b in 2024, which would reflect a perceptible 5.3% reduction in RumbleOn's sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 85% to US$0.83. Yet before this consensus update, the analysts had been forecasting revenues of US$1.4b and losses of US$0.73 per share in 2024. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out our latest analysis for RumbleOn

The consensus price target fell 22% to US$7.38, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 10% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 21% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.8% annually for the foreseeable future. It's pretty clear that RumbleOn's revenues are expected to perform substantially worse 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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that RumbleOn's revenues are expected to grow 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 RumbleOn'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 RumbleOn after today.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with RumbleOn's business, like major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 1 other concern we've identified.

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 with high insider ownership.

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