Market forces rained on the parade of Grove Collaborative Holdings, Inc. (NYSE:GROV) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
Following the downgrade, the consensus from two analysts covering Grove Collaborative Holdings is for revenues of US$223m in 2024, implying a chunky 14% decline in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 49% to US$0.61 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$253m and losses of US$0.27 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
NYSE:GROV Earnings and Revenue Growth March 11th 2024
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 also point out that the forecast 14% annualised revenue decline to the end of 2024 is roughly in line with the historical trend, which saw revenues shrink 14% annually over the past three years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.2% annually. So while a broad number of companies are forecast to grow, unfortunately Grove Collaborative Holdings is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Grove Collaborative Holdings' revenues are expected to grow slower than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Grove Collaborative Holdings, and a few readers might choose to steer clear of the stock.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Grove Collaborative Holdings going out as far as 2025, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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.