It's been a good week for Tuya Inc. (NYSE:TUYA) shareholders, because the company has just released its latest quarterly results, and the shares gained 4.1% to US$2.04. Revenues were US$62m, and Tuya came in a solid 16% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for Tuya from five analysts is for revenues of US$280.5m in 2024. If met, it would imply a meaningful 15% increase on its revenue over the past 12 months. The loss per share is expected to ameliorate slightly, reducing to US$0.07. Yet prior to the latest earnings, the analysts had been forecasting 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 favorable reduction in 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. 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. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 13% annually. So it looks like Tuya is expected to grow faster than its competitors, at least for a while.
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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 Tuya going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for Tuya that you need to take into consideration.
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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.