Earnings Release: Here's Why Analysts Cut Their BurgerFi International, Inc. (NASDAQ:BFI) Price Target To US$3.75
BurgerFi International, Inc. (NASDAQ:BFI) last week reported its latest first-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues of US$46m beat expectations by a respectable 3.1%, although statutory losses per share increased. BurgerFi International lost US$0.39, which was 63% more than what the analysts had included in their models. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on BurgerFi International after the latest results.
Check out our latest analysis for BurgerFi International
Taking into account the latest results, BurgerFi International's two analysts currently expect revenues in 2023 to be US$181.0m, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 78% to US$0.93. Before this earnings announcement, the analysts had been modelling revenues of US$179.5m and losses of US$0.78 per share in 2023. While this year's revenue estimates held steady, there was also a considerable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 38% to US$3.75, with the analysts signalling that growing losses would be a definite concern.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that BurgerFi International's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 1.1% growth on an annualised basis. This is compared to a historical growth rate of 68% over the past three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% annually. Factoring in the forecast slowdown in growth, it seems obvious that BurgerFi International is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of BurgerFi International's future valuation.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.
You still need to take note of risks, for example - BurgerFi International has 4 warning signs we think you should be aware of.
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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.
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