Industry Analysts Just Made A Captivating Upgrade To Their Flora Growth Corp. (NASDAQ:FLGC) Revenue Forecasts
Shareholders in Flora Growth Corp. (NASDAQ:FLGC) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Flora Growth will make substantially more sales than they'd previously expected.
After the upgrade, the five analysts covering Flora Growth are now predicting revenues of US$73m in 2023. If met, this would reflect a major 140% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 93% to US$0.048. Yet before this consensus update, the analysts had been forecasting revenues of US$66m and losses of US$0.052 per share in 2023. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to next year's revenue estimates, while at the same time reducing their loss estimates.
View our latest analysis for Flora Growth
Yet despite these upgrades, the analysts cut their price target 7.5% to US$2.47, implicitly signalling that the ongoing losses are likely to weigh negatively on Flora Growth'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. There are some variant perceptions on Flora Growth, with the most bullish analyst valuing it at US$4.50 and the most bearish at US$0.85 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
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. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 101% growth on an annualised basis. That is in line with its 123% annual growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 8.2% annually. So although Flora Growth is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses next year, perhaps suggesting Flora Growth is moving incrementally towards profitability. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better 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 Flora Growth's future valuation. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at Flora Growth.
Analysts are definitely bullish on Flora Growth, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. You can learn more, and discover the 4 other risks we've identified, for free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading 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.
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