US$24.50: That's What Analysts Think Similarweb Ltd. (NYSE:SMWB) Is Worth After Its Latest Results

Simply Wall St
February 19, 2022
Source: Shutterstock

Last week, you might have seen that Similarweb Ltd. (NYSE:SMWB) released its annual result to the market. The early response was not positive, with shares down 7.2% to US$12.71 in the past week. Revenues came in at US$138m, in line with expectations, while statutory losses per share were substantially higher than expected, at US$1.30 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Similarweb

NYSE:SMWB Earnings and Revenue Growth February 19th 2022

Taking into account the latest results, the most recent consensus for Similarweb from six analysts is for revenues of US$193.1m in 2022 which, if met, would be a huge 40% increase on its sales over the past 12 months. Per-share losses are supposed to see a sharp uptick, reaching US$1.10. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$175.6m and losses of US$0.71 per share in 2022. So it's pretty clear the analysts have mixed opinions on Similarweb even after this update; although they upped their revenue numbers, it came at the cost of a considerable increase to per-share losses.

Spiting the revenue upgrading, the average price target fell 11% to US$24.50, clearly signalling that higher forecast losses are a valuation concern. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Similarweb, with the most bullish analyst valuing it at US$32.00 and the most bearish at US$21.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 40% growth on an annualised basis. That is in line with its 47% annual growth over the past year. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 14% annually. So it's pretty clear that Similarweb is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Similarweb analysts - going out to 2024, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Similarweb that you need to be mindful 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.