The analysts covering Rumble Inc. (NASDAQ:RUM) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
After the downgrade, the two analysts covering Rumble are now predicting revenues of US$160m in 2024. If met, this would reflect a huge 118% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$231m of revenue in 2024. It looks like forecasts have become a fair bit less optimistic on Rumble, given the pretty serious reduction to revenue estimates.
Notably, the analysts have cut their price target 40% to US$6.00, suggesting concerns around Rumble's valuation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Rumble's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Rumble's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 87% growth on an annualised basis. This is compared to a historical growth rate of 447% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 10% per year. So it's pretty clear that, while Rumble's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for next year. The analysts also expect revenues to grow faster than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Rumble going forwards.
Of course, there's always more to the story. At least one of Rumble's two analysts has provided estimates out to 2025, which can be seen 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 downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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