It's been a mediocre week for Inspirato Incorporated (NASDAQ:ISPO) shareholders, with the stock dropping 14% to US$4.53 in the week since its latest yearly results. It was a pretty bad result overall; while revenues were in line with expectations at US$329m, statutory losses exploded to US$15.31 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the recent earnings report, the consensus from three analysts covering Inspirato is for revenues of US$290.9m in 2024. This implies an uneasy 12% decline in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 60% to US$6.60. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$310.9m and losses of US$8.72 per share in 2024. Although the revenue estimates have fallen somewhat, Inspirato'sfuture looks a little different to the past, with a considerable decrease in the loss per share forecasts in particular.
There was a decent 57% increase in the price target to US$18.00, with the analysts clearly signalling that the expected reduction in losses is a positive, despite a weaker revenue 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 highlight that revenue is expected to reverse, with a forecast 12% annualised decline to the end of 2024. That is a notable change from historical growth of 17% 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 9.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Inspirato is expected to lag the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. 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. Even so, long term profitability is more important for the value creation process. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Inspirato. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Inspirato analysts - going out to 2025, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with Inspirato (including 1 which is a bit unpleasant) .
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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.