Earnings Release: Here's Why Analysts Cut Their Rubicon Technologies, Inc. (NYSE:RBT) Price Target To US$2.05

It's been a sad week for Rubicon Technologies, Inc. (NYSE:RBT), who've watched their investment drop 11% to US$0.65 in the week since the company reported its full-year result. Revenues of US$698m were in line with expectations, although statutory losses per share were US$2.50, some 15% smaller than was expected. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Rubicon Technologies

Taking into account the latest results, the current consensus from Rubicon Technologies' dual analysts is for revenues of US$742.5m in 2024. This would reflect a modest 6.4% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 45% to US$0.74. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$748.0m and losses of US$4.30 per share in 2024. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a very favorable reduction to losses per share in particular.

The consensus price target fell 33% to US$2.05despite the forecast for smaller losses next year. It looks like the ongoing lack of profitability is starting to weigh on valuations.

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 Rubicon Technologies' revenue growth is expected to slow, with the forecast 6.4% annualised growth rate until the end of 2024 being well below the historical 10% p.a. growth over the last three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Rubicon Technologies.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss 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 Rubicon Technologies' revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Rubicon Technologies' 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. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

You should always think about risks though. Case in point, we've spotted 5 warning signs for Rubicon Technologies you should be aware of, and 2 of them don't sit too well with us.

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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.