Shareholders might have noticed that SmartRent, Inc. (NYSE:SMRT) filed its yearly result this time last week. The early response was not positive, with shares down 4.8% to US$2.76 in the past week. Revenues came in at US$237m, in line with forecasts and the company reported a statutory loss of US$0.17 per share, roughly in line with expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
NYSE:SMRT Earnings and Revenue Growth March 8th 2024
Taking into account the latest results, the current consensus from SmartRent's eight analysts is for revenues of US$273.0m in 2024. This would reflect a decent 15% increase on its revenue over the past 12 months. Statutory losses are forecast to balloon 86% to US$0.024 per share. In the lead-up to this report, the analysts had been modelling revenues of US$289.3m and earnings per share (EPS) of US$0.014 in 2024. There looks to have been a significant drop in sentiment regarding SmartRent's prospects after these latest results, with a minor downgrade to revenues and the analysts now forecasting a loss instead of a profit.
The average price target was broadly unchanged at US$4.41, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic SmartRent analyst has a price target of US$6.00 per share, while the most pessimistic values it at US$3.20. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. It's pretty clear that there is an expectation that SmartRent's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 15% growth on an annualised basis. This is compared to a historical growth rate of 45% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.3% per year. Even after the forecast slowdown in growth, it seems obvious that SmartRent is also expected to grow faster than the wider industry.
The Bottom Line
The biggest low-light for us was that the forecasts for SmartRent dropped from profits to a loss next year. They also downgraded SmartRent's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at US$4.41, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for SmartRent going out to 2026, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 1 warning sign for SmartRent that you need to be mindful 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.