Bearish: Analysts Just Cut Their Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) Revenue and EPS estimates
One thing we could say about the analysts on Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the latest downgrade, the three analysts covering Hydrofarm Holdings Group provided consensus estimates of US$193m revenue in 2024, which would reflect an uncomfortable 15% decline on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 56% to US$0.62. Yet before this consensus update, the analysts had been forecasting revenues of US$224m and losses of US$0.55 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.
Check out our latest analysis for Hydrofarm Holdings Group
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with a forecast 15% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 3.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.3% per year. It's pretty clear that Hydrofarm Holdings Group's revenues are expected to perform substantially worse 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 Hydrofarm Holdings Group. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Hydrofarm Holdings Group's revenues are expected to grow slower than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Hydrofarm Holdings Group, and their negativity could be grounds for caution.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Hydrofarm Holdings Group going out to 2026, and you can see them free on our platform here.
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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.
