Analysts Are More Bearish On urban-gro, Inc. (NASDAQ:UGRO) Than They Used To Be
Today is shaping up negative for urban-gro, Inc. (NASDAQ:UGRO) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
Following the downgrade, the most recent consensus for urban-gro from its five analysts is for revenues of US$90m in 2023 which, if met, would be a huge 37% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 37% to US$1.27 per share. However, before this estimates update, the consensus had been expecting revenues of US$102m and US$0.79 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.
Check out our latest analysis for urban-gro
The consensus price target fell 16% to US$7.08, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.
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. The analysts are definitely expecting urban-gro's growth to accelerate, with the forecast 89% annualised growth to the end of 2023 ranking favourably alongside historical growth of 31% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect urban-gro to grow faster than the wider industry.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at urban-gro. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of urban-gro.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with urban-gro's financials, such as dilutive stock issuance over the past year. For more information, you can click here to discover this and the 4 other flags we've identified.
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.
