Analysts Have Been Trimming Their Deveron Corp. (CVE:FARM) Price Target After Its Latest Report

The analysts might have been a bit too bullish on Deveron Corp. (CVE:FARM), given that the company fell short of expectations when it released its quarterly results last week. It was not a great statutory result, with revenues coming in 31% lower than the analysts predicted. Unsurprisingly, earnings also fell seriously short of forecasts, turning into a per-share loss of CA$0.04. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Deveron

Following the latest results, Deveron's four analysts are now forecasting revenues of CA$53.2m in 2023. This would be a sizeable 191% improvement in sales compared to the last 12 months. Per-share statutory losses are expected to explode, reaching CA$0.02 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$53.8m and break-even in 2023. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a EPS estimates.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 8.6% to CA$1.33, with the analysts signalling that growing losses would be a definite concern. 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 Deveron at CA$1.70 per share, while the most bearish prices it at CA$1.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. The analysts are definitely expecting Deveron's growth to accelerate, with the forecast 135% annualised growth to the end of 2023 ranking favourably alongside historical growth of 68% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.6% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Deveron is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are 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 Deveron'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. We have forecasts for Deveron going out to 2024, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with Deveron .

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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.

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