Analysts Have Been Trimming Their Grove Collaborative Holdings, Inc. (NYSE:GROV) Price Target After Its Latest Report

As you might know, Grove Collaborative Holdings, Inc. (NYSE:GROV) recently reported its quarterly numbers. The results overall were pretty much dead in line with analyst forecasts; revenues were US$72m and statutory losses were US$0.08 per share. 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.

View our latest analysis for Grove Collaborative Holdings

Taking into account the latest results, the current consensus, from the dual analysts covering Grove Collaborative Holdings, is for revenues of US$267.8m in 2023, which would reflect a not inconsiderable 12% reduction in Grove Collaborative Holdings' sales over the past 12 months. Losses are expected to hold steady at around US$0.30. Before this earnings announcement, the analysts had been modelling revenues of US$268.2m and losses of US$0.43 per share in 2023. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading revenues and making a very promising decrease in losses per share in particular.

The consensus price target fell 25% to US$1.50despite the forecast for smaller losses next year. It looks like the ongoing lack of profitability is starting to weigh on valuations.

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. One thing that stands out from these estimates is that revenues are expected to keep falling until the end of 2023, roughly in line with the historical decline of 19% per annum over the past year. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 6.3% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Grove Collaborative Holdings to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Grove Collaborative Holdings going out as far as 2025, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Grove Collaborative Holdings (2 can't be ignored!) that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.