Yahoo Finance Decibel Cannabis Company Inc. (CVE:DB) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
Shareholders in Decibel Cannabis Company Inc. (CVE:DB) had a terrible week, as shares crashed 22% to CA$0.07 in the week since its latest quarterly results. Revenues were CA$21m, and Decibel Cannabis was a dismal 12% short of estimates. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Decibel Cannabis
After the latest results, the consensus from Decibel Cannabis' three analysts is for revenues of CA$98.5m in 2024, which would reflect a definite 12% decline in revenue compared to the last year of performance. Earnings are expected to improve, with Decibel Cannabis forecast to report a statutory profit of CA$0.02 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$108.3m and earnings per share (EPS) of CA$0.025 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.
The analysts made no major changes to their price target of CA$0.37, suggesting the downgrades are not expected to have a long-term impact on Decibel Cannabis' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Decibel Cannabis, with the most bullish analyst valuing it at CA$0.50 and the most bearish at CA$0.25 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 16% annualised decline to the end of 2024. That is a notable change from historical growth of 49% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.6% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Decibel Cannabis is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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. 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. At Simply Wall St, we have a full range of analyst estimates for Decibel Cannabis going out to 2026, 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 Decibel Cannabis 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.
