Some Analysts Just Cut Their Latham Group, Inc. (NASDAQ:SWIM) Estimates
One thing we could say about the analysts on Latham Group, Inc. (NASDAQ:SWIM) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
Following the latest downgrade, the current consensus, from the seven analysts covering Latham Group, is for revenues of US$634m in 2023, which would reflect an uneasy 13% reduction in Latham Group's sales over the past 12 months. Before the latest update, the analysts were foreseeing US$732m of revenue in 2023. The consensus view seems to have become more pessimistic on Latham Group, noting the measurable cut to revenue estimates in this update.
Check out our latest analysis for Latham Group
The consensus price target fell 17% to US$6.69, with the analysts clearly less optimistic about Latham Group's valuation following this update. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Latham Group, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$3.50 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 10% by the end of 2023. This indicates a significant reduction from annual growth of 28% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.3% annually for the foreseeable future. It's pretty clear that Latham Group's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Latham Group next year. They also expect company revenue to perform worse than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Latham Group's future valuation. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Latham Group going forwards.
Need some more information? We have estimates for Latham Group from its seven analysts out until 2024, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
