Vroom, Inc. (NASDAQ:VRM) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

Vroom, Inc. (NASDAQ:VRM) just released its latest quarterly report and things are not looking great. It was a pretty negative result overall, with revenues of US$236m missing analyst predictions by 4.5%. Worse, the business reported a statutory loss of US$0.59 per share, much larger than the analysts had forecast prior to the result. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Vroom

After the latest results, the four analysts covering Vroom are now predicting revenues of US$1.07b in 2024. If met, this would reflect a huge 23% improvement in revenue compared to the last 12 months. Per-share losses are predicted to creep up to US$1.50. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.14b and losses of US$1.56 per share in 2024. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers fell somewhat.

The consensus price target was broadly unchanged at US$1.08, implying that the business is performing roughly in line with expectations, despite adjustments to both revenue and earnings estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Vroom analyst has a price target of US$1.25 per share, while the most pessimistic values it at US$1.00. This is a very narrow spread of estimates, implying either that Vroom is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Vroom's rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 9.4% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Vroom is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Yet - earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$1.08, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Vroom analysts - going out to 2025, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 4 warning signs for Vroom (of which 2 don't sit too well with us!) you should know about.

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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.