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The RealReal, Inc. (NASDAQ:REAL) shareholders are probably feeling a little disappointed, since its shares fell 5.6% to US$14.20 in the week after its latest third-quarter results. The statutory results were not great - while revenues of US$78m were in line with expectations,RealReal lost US$0.49 a share in the process. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from RealReal's twelve analysts is for revenues of US$420.7m in 2021, which would reflect a major 37% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 24% to US$1.28. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$431.9m and losses of US$1.10 per share in 2021. While next year's revenue estimates dropped there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The average price target was broadly unchanged at US$17.77, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic RealReal analyst has a price target of US$21.00 per share, while the most pessimistic values it at US$13.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the RealReal's past performance and to peers in the same industry. The analysts are definitely expecting RealReal's growth to accelerate, with the forecast 37% growth ranking favourably alongside historical growth of 26% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect RealReal 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 their revenue estimates, although industry data suggests that RealReal's revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$17.77, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on RealReal. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for RealReal going out to 2024, and you can see them free on our platform here..
Before you take the next step you should know about the 3 warning signs for RealReal that we have uncovered.
This article by Simply Wall St is general in nature. 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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