Last week saw the newest second-quarter earnings release from Grove Collaborative Holdings, Inc. (NYSE:GROV), an important milestone in the company's journey to build a stronger business. Revenues were in line with expectations, at US$52m, while statutory losses ballooned to US$0.28 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the recent earnings report, the consensus from dual analysts covering Grove Collaborative Holdings is for revenues of US$211.0m in 2024. This implies a perceptible 7.2% decline in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 21% to US$0.69. Before this latest report, the consensus had been expecting revenues of US$219.9m and US$0.55 per share in losses. So it's pretty clear the analysts have mixed opinions on Grove Collaborative Holdings after this update; revenues were downgraded and per-share losses expected to increase.
The consensus price target fell 17% to US$2.50, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.
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. We would also point out that the forecast 14% annualised revenue decline to the end of 2024 is better than the historical trend, which saw revenues shrink 20% annually over the past three years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 4.8% annually. So while a broad number of companies are forecast to grow, unfortunately Grove Collaborative Holdings is expected to see its revenue affected worse than other companies in the 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 Grove Collaborative Holdings. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Grove Collaborative Holdings' future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
However, before you get too enthused, we've discovered 3 warning signs for Grove Collaborative Holdings that 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.