Yahoo Finance Earnings Release: Here's Why Analysts Cut Their Charlotte's Web Holdings, Inc. (TSE:CWEB) Price Target To CA$0.65
It's been a mediocre week for Charlotte's Web Holdings, Inc. (TSE:CWEB) shareholders, with the stock dropping 18% to CA$0.23 in the week since its latest first-quarter results. Statutory results overall were mixed, with revenues coming in 21% lower than the analysts predicted. What's really surprising is that losses of US$0.06 per share were pretty much in line with forecasts, despite the revenue miss. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Charlotte's Web Holdings
Following last week's earnings report, Charlotte's Web Holdings' three analysts are forecasting 2024 revenues to be US$57.5m, approximately in line with the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$0.19. Before this latest report, the consensus had been expecting revenues of US$64.7m and US$0.22 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also reducing the estimated losses the business will incur.
The analysts have cut their price target 14% to CA$0.65per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would also point out that the forecast 1.6% annualised revenue decline to the end of 2024 is better than the historical trend, which saw revenues shrink 6.8% annually over the past five years By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 9.1% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Charlotte's Web Holdings to suffer worse than 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 negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings per share are more important to value creation for shareholders. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Charlotte's Web Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Charlotte's Web Holdings analysts - going out to 2025, and you can see them free on our platform here.
Even so, be aware that Charlotte's Web Holdings is showing 4 warning signs in our investment analysis , you should know about...
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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.
