Analyst Forecasts Just Became More Bearish On Grove Collaborative Holdings, Inc. (NYSE:GROV)
Today is shaping up negative for Grove Collaborative Holdings, Inc. (NYSE:GROV) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
After the downgrade, the consensus from Grove Collaborative Holdings' two analysts is for revenues of US$253m in 2024, which would reflect a measurable 7.4% decline in sales compared to the last year of performance. Before the latest update, the analysts were foreseeing US$287m of revenue in 2024. The consensus view seems to have become more pessimistic on Grove Collaborative Holdings, noting the measurable cut to revenue estimates in this update.
Check out our latest analysis for Grove Collaborative Holdings
Notably, the analysts have cut their price target 7.7% to US$3.00, suggesting concerns around Grove Collaborative Holdings' valuation.
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. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2024 compared to the historical decline of 12% per annum 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 5.7% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Grove Collaborative Holdings to suffer worse than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Grove Collaborative Holdings next year. They also expect company revenue to perform worse than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Grove Collaborative Holdings after today.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Grove Collaborative Holdings, including dilutive stock issuance over the past year. For more information, you can click here to discover this and the 3 other concerns we've identified.
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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.
