The Lion Electric Company (TSE:LEV) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
The Lion Electric Company (TSE:LEV) missed earnings with its latest full-year results, disappointing overly-optimistic forecasters. It definitely looks like a negative result overall with revenues falling 10% short of analyst estimates at US$253m. Statutory losses were US$0.46 per share, 52% bigger than what the analysts expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Lion Electric
Taking into account the latest results, the current consensus from Lion Electric's eight analysts is for revenues of US$362.0m in 2024. This would reflect a huge 43% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 26% to US$0.34. Before this earnings announcement, the analysts had been modelling revenues of US$531.8m and losses of US$0.28 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.
The consensus price target fell 16% to CA$3.39, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Lion Electric at CA$5.42 per share, while the most bearish prices it at CA$2.03. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
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 can infer from the latest estimates that forecasts expect a continuation of Lion Electric'shistorical trends, as the 43% annualised revenue growth to the end of 2024 is roughly in line with the 53% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 8.3% per year. So although Lion Electric is expected to maintain its revenue growth rate, it's definitely 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. They also downgraded Lion Electric's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Lion Electric going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Lion Electric has 2 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.
