US$10.83 - That's What Analysts Think Similarweb Ltd. (NYSE:SMWB) Is Worth After These Results
It's been a pretty great week for Similarweb Ltd. (NYSE:SMWB) shareholders, with its shares surging 19% to US$8.32 in the week since its latest full-year results. Similarweb reported revenues of US$218m, in line with expectations, but it unfortunately also reported (statutory) losses of US$0.38 per share, which were slightly larger than expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Similarweb
Following the latest results, Similarweb's six analysts are now forecasting revenues of US$244.7m in 2024. This would be a decent 12% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 62% to US$0.14. Before this earnings announcement, the analysts had been modelling revenues of US$240.4m and losses of US$0.10 per share in 2024. While this year's revenue estimates held steady, there was also a sizeable expansion in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
Despite expectations of heavier losses next year,the analysts have lifted their price target 20% to US$10.83, perhaps implying these losses are not expected to be recurring over the long term. 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. The most optimistic Similarweb analyst has a price target of US$14.00 per share, while the most pessimistic values 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.
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. It's pretty clear that there is an expectation that Similarweb's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 28% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 13% annually. So it's pretty clear that, while Similarweb's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Similarweb. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Similarweb going out to 2026, 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 Similarweb that we have uncovered.
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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.
