Shift Technologies, Inc. (NASDAQ:SFT) Just Released Its First-Quarter Earnings: Here's What Analysts Think
Shareholders might have noticed that Shift Technologies, Inc. (NASDAQ:SFT) filed its first-quarter result this time last week. The early response was not positive, with shares down 4.2% to US$7.66 in the past week. Shift Technologies beat revenue forecasts by a solid 12%, hitting US$106m, but it also saw a corresponding increase in statutory losses, which hit US$0.55, some -20% greater than the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Shift Technologies
After the latest results, the seven analysts covering Shift Technologies are now predicting revenues of US$499.5m in 2021. If met, this would reflect a substantial 84% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 22% to US$1.85. Before this earnings announcement, the analysts had been modelling revenues of US$448.4m and losses of US$1.68 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analysts significantly increasing their revenue forecasts while also expecting losses per share to increase. It looks like the revenue growth will not be achieved without incremental costs.
There was no major change to the consensus price target of US$12.33, with growing revenues seemingly enough to offset the concern of growing losses. 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 Shift Technologies at US$15.00 per share, while the most bearish prices it at US$9.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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 clear from the latest estimates that Shift Technologies' rate of growth is expected to accelerate meaningfully, with the forecast 125% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 87% over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Shift Technologies is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 Shift Technologies going out to 2025, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with Shift Technologies (including 1 which is significant) .
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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