The Glimpse Group, Inc. (NASDAQ:VRAR) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Results overall were solid, with revenues arriving 3.5% better than analyst forecasts at US$3.1m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.01 per share, were 3.5% smaller than the analyst expected. Following the result, the analyst has 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 analyst has changed their earnings models, following these results.
View our latest analysis for Glimpse Group
Taking into account the latest results, the current consensus, from the sole analyst covering Glimpse Group, is for revenues of US$11.9m in 2024. This implies a perceptible 5.8% reduction in Glimpse Group's revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 69% to US$0.43. Before this earnings announcement, the analyst had been modelling revenues of US$16.5m and losses of US$0.53 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analyst making a serious cut to their revenue forecasts while also reducing the estimated losses the business will incur.
The analyst has cut their price target 41% to US$2.73per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Glimpse Group's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 7.7% by the end of 2024. This indicates a significant reduction from annual growth of 61% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Glimpse Group is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analyst 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. Even so, long term profitability is more important for the value creation process. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Glimpse Group'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 analyst estimates for Glimpse Group going out as far as 2025, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 5 warning signs for Glimpse Group (2 can't be ignored) 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.