Tuya Inc. (NYSE:TUYA) Just Reported First-Quarter Earnings And Analysts Are Lifting Their Estimates

Shareholders might have noticed that Tuya Inc. (NYSE:TUYA) filed its first-quarter result this time last week. The early response was not positive, with shares down 3.5% to US$1.94 in the past week. It was a pretty good result, with revenues of US$62m, and Tuya came in a solid 16% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Tuya after the latest results.

Check out our latest analysis for Tuya

Taking into account the latest results, the consensus forecast from Tuya's five analysts is for revenues of US$280.5m in 2024. This reflects a solid 15% improvement in revenue compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$0.07. Before this earnings announcement, the analysts had been modelling revenues of US$263.4m and losses of US$0.08 per share in 2024. So it seems there's been a definite increase in optimism about Tuya's future following the latest consensus numbers, with a cut to the loss per share forecasts in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of US$2.98, implying that their latest estimates don't have a long term impact on what they think the stock is worth. 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 Tuya analyst has a price target of US$3.50 per share, while the most pessimistic values it at US$2.70. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. One thing stands out from these estimates, which is that Tuya is forecast to grow faster in the future than it has in the past, with revenues expected to display 20% annualised growth until the end of 2024. If achieved, this would be a much better result than the 8.3% annual decline over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 13% per year. Not only are Tuya's revenues expected to improve, it seems that the analysts are also expecting it to grow faster 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. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$2.98, with the latest estimates not enough to have an impact on their price targets.

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 Tuya going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 1 warning sign for Tuya that we have uncovered.

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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.