Allbirds, Inc. (NASDAQ:BIRD) shareholders are probably feeling a little disappointed, since its shares fell 6.8% to US$0.57 in the week after its latest first-quarter results. It was a respectable set of results; while revenues of US$39m were in line with analyst predictions, statutory losses were 16% smaller than expected, with Allbirds losing US$0.18 per share. 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 Allbirds after the latest results.

See our latest analysis for Allbirds

Following the recent earnings report, the consensus from five analysts covering Allbirds is for revenues of US$198.6m in 2024. This implies an uncomfortable 17% decline in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 31% to US$0.64. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$198.1m and losses of US$0.69 per share in 2024. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.

Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 26% to US$0.85. It looks likethe analysts have become less optimistic about the overall business. 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. Currently, the most bullish analyst values Allbirds at US$1.00 per share, while the most bearish prices it at US$0.70. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 22% annualised decline to the end of 2024. That is a notable change from historical growth of 1.5% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.0% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Allbirds is expected to lag 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 they 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Allbirds going out to 2025, and you can see them free on our platform here.

Even so, be aware that Allbirds is showing 4 warning signs in our investment analysis , you should know about...

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.