Wheels Up Experience Inc. (NYSE:UP) Just Reported First-Quarter Earnings And Analysts Are Lifting Their Estimates

Wheels Up Experience Inc. (NYSE:UP) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Results overall were credible, with revenues arriving 8.2% better than analyst forecasts at US$326m. Higher revenues also resulted in lower statutory losses, which were US$0.36 per share, some 8.2% smaller than the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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 Wheels Up Experience

After the latest results, the seven analysts covering Wheels Up Experience are now predicting revenues of US$1.50b in 2022. If met, this would reflect a solid 19% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$1.28 per share. Before this earnings announcement, the analysts had been modelling revenues of US$1.40b and losses of US$1.29 per share in 2022.

The analysts trimmed their valuations, with the average price target falling 16% to US$5.40, with the ongoing losses clearly weighing on sentiment despite the upgraded revenue estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Wheels Up Experience at US$8.00 per share, while the most bearish prices it at US$2.40. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Wheels Up Experience's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 26% growth on an annualised basis. This is compared to a historical growth rate of 57% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% per year. Even after the forecast slowdown in growth, it seems obvious that Wheels Up Experience is also expected 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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster 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 Wheels Up Experience's 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. At Simply Wall St, we have a full range of analyst estimates for Wheels Up Experience going out to 2024, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for Wheels Up Experience you should be aware of.

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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.