Earnings Release: Here's Why Analysts Cut Their ThredUp Inc. (NASDAQ:TDUP) Price Target To US$17.30

Shareholders might have noticed that ThredUp Inc. (NASDAQ:TDUP) filed its full-year result this time last week. The early response was not positive, with shares down 4.4% to US$7.57 in the past week. The statutory results were not great - while revenues of US$252m were in line with expectations,ThredUp lost US$0.82 a share in the process. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for ThredUp

Taking into account the latest results, the consensus forecast from ThredUp's ten analysts is for revenues of US$336.4m in 2022, which would reflect a substantial 34% improvement in sales compared to the last 12 months. Losses are forecast to balloon 26% to US$0.81 per share. Before this latest report, the consensus had been expecting revenues of US$333.3m and US$0.63 per share in losses. While this year's revenue estimates held steady, there was also a considerable increase to loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 24% to US$17.30, with the analysts signalling that growing losses would be a definite concern. 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. There are some variant perceptions on ThredUp, with the most bullish analyst valuing it at US$25.00 and the most bearish at US$9.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 ThredUp's rate of growth is expected to accelerate meaningfully, with the forecast 34% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 18% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that ThredUp is expected to grow much faster than its 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 ThredUp. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of ThredUp's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for ThredUp going out to 2024, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for ThredUp you should be aware of.

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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.