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Spire Global, Inc. (NYSE:SPIR) Just Reported Earnings, And Analysts Cut Their Target Price

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Spire Global, Inc. (NYSE:SPIR) just released its latest first-quarter results and things are looking bullish. Revenues and losses per share were both better than expected, with revenues of US$18m leading estimates by 6.3%. Statutory losses were smaller than the analystsexpected, coming in at US$0.13 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Spire Global

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the current consensus from Spire Global's seven analysts is for revenues of US$87.6m in 2022, which would reflect a huge 69% increase on its sales over the past 12 months. Losses are forecast to balloon 307% to US$0.52 per share. Before this earnings announcement, the analysts had been modelling revenues of US$86.9m and losses of US$0.53 per share in 2022. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.

Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 29% to US$3.93. It looks likethe analysts have become less optimistic about the overall business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Spire Global, with the most bullish analyst valuing it at US$6.00 and the most bearish at US$1.50 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Spire Global's growth to accelerate, with the forecast 102% annualised growth to the end of 2022 ranking favourably alongside historical growth of 51% per annum over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Spire Global is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Spire Global's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Spire Global analysts - 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 1 warning sign for Spire Global that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.