KORE Group Holdings, Inc. (NYSE:KORE) Just Reported Earnings, And Analysts Cut Their Target Price

Shareholders will be ecstatic, with their stake up 25% over the past week following KORE Group Holdings, Inc.'s (NYSE:KORE) latest quarterly results. Revenues of US$70m beat expectations by a respectable 6.7%, although statutory losses per share increased. KORE Group Holdings lost US$0.15, which was 106% more than what the analysts had included in their models. 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.

See our latest analysis for KORE Group Holdings

Taking into account the latest results, the five analysts covering KORE Group Holdings provided consensus estimates of US$265.9m revenue in 2022, which would reflect a perceptible 2.1% decline on its sales over the past 12 months. Losses are expected to be contained, narrowing 15% from last year to US$0.47. Before this latest report, the consensus had been expecting revenues of US$267.0m and US$0.35 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 16% to US$8.50, with the analysts signalling that growing losses would be a definite 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. Currently, the most bullish analyst values KORE Group Holdings at US$14.00 per share, while the most bearish prices it at US$3.50. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 4.1% by the end of 2022. This indicates a significant reduction from annual growth of 19% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.0% annually for the foreseeable future. It's pretty clear that KORE Group Holdings' revenues are expected to perform substantially worse than the wider 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 KORE Group Holdings. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that KORE Group Holdings' revenues are expected to perform worse 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 KORE Group Holdings' 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. We have forecasts for KORE Group Holdings going out to 2024, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with KORE Group Holdings , and understanding these should be part of your investment process.

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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.