Yahoo Finance Analysts Have Been Trimming Their Sonder Holdings Inc. (NASDAQ:SOND) Price Target After Its Latest Report
Shareholders might have noticed that Sonder Holdings Inc. (NASDAQ:SOND) filed its quarterly result this time last week. The early response was not positive, with shares down 6.4% to US$2.04 in the past week. Revenues were in line with expectations, at US$125m, while statutory losses ballooned to US$0.35 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sonder Holdings after the latest results.
See our latest analysis for Sonder Holdings
After the latest results, the three analysts covering Sonder Holdings are now predicting revenues of US$678.1m in 2023. If met, this would reflect a sizeable 64% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 27% to US$0.63. Before this latest report, the consensus had been expecting revenues of US$678.2m and US$0.64 per share in losses. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.
The consensus price target fell 6.5% to US$3.58despite the forecast for smaller losses next year. It looks like the ongoing lack of profitability is starting to weigh on valuations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Sonder Holdings analyst has a price target of US$4.00 per share, while the most pessimistic values it at US$3.25. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Sonder Holdings is an easy business to forecast or the the analysts are all using similar assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Sonder Holdings'historical trends, as the 49% annualised revenue growth to the end of 2023 is roughly in line with the 50% annual revenue growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 13% annually. So although Sonder Holdings is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Sonder Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for Sonder Holdings going out to 2024, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 3 warning signs for Sonder Holdings you should be aware of, and 2 of them are a bit concerning.
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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.
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