It's been a mediocre week for ON24, Inc. (NYSE:ONTF) shareholders, with the stock dropping 15% to US$7.06 in the week since its latest annual results. The statutory results were mixed overall, with revenues of US$164m in line with analyst forecasts, but losses of US$1.16 per share, some 4.7% larger than the analysts were predicting. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the six analysts covering ON24 provided consensus estimates of US$144.9m revenue in 2024, which would reflect a chunky 11% decline over the past 12 months. Losses are expected to be contained, narrowing 14% from last year to US$1.07. Before this latest report, the consensus had been expecting revenues of US$147.4m and US$0.86 per share in losses. So it's pretty clear the analysts have mixed opinions on ON24 even after this update; although they reconfirmed their revenue numbers, it came at the cost of a considerable increase to per-share losses.
As a result, there was no major change to the consensus price target of US$8.67, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values ON24 at US$9.00 per share, while the most bearish prices it at US$8.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 11% annualised decline to the end of 2024. That is a notable change from historical growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 12% per year. It's pretty clear that ON24's revenues are expected to perform substantially worse than the wider 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, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that ON24's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$8.67, with the latest estimates not enough to have an impact on their price targets.
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 ON24 going out to 2025, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 2 warning signs for ON24 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.