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Analysts Have Made A Financial Statement On cbdMD, Inc.'s (NYSEMKT:YCBD) First-Quarter Report

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Simply Wall St
·3 min read
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As you might know, cbdMD, Inc. (NYSEMKT:YCBD) recently reported its first-quarter numbers. The results don't look great, especially considering that statutory losses grew 620% toUS$0.18 per share. Revenues of US$13m did beat expectations by 8.1%, but it looks like a bit of a cold comfort. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for cbdMD

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the most recent consensus for cbdMD from three analysts is for revenues of US$52.3m in 2021 which, if met, would be a decent 19% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 58% to US$0.085. Before this latest report, the consensus had been expecting revenues of US$51.8m and US$0.045 per share in losses. While this year's revenue estimates held steady, there was also a regrettable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The consensus price target held steady at US$5.70, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's 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 cbdMD analyst has a price target of US$8.00 per share, while the most pessimistic values it at US$4.10. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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 cbdMD's revenue growth will slow down substantially, with revenues next year expected to grow 19%, compared to a historical growth rate of 32% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.9% next year. Even after the forecast slowdown in growth, it seems obvious that cbdMD is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$5.70, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for cbdMD going out to 2024, and you can see them free on our platform here.

You still need to take note of risks, for example - cbdMD has 2 warning signs we think you should be aware of.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.