Edible Garden AG Incorporated (NASDAQ:EDBL) Just Reported Earnings, And Analysts Cut Their Target Price
One of the biggest stories of last week was how Edible Garden AG Incorporated (NASDAQ:EDBL) shares plunged 32% in the week since its latest annual results, closing yesterday at US$2.21. The results overall were pretty much dead in line with analyst forecasts; revenues were US$12m and statutory losses were US$48.68 per share. This is an important time for investors, as they can track a company's performance in its report, look at what expert is 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 analyst is expecting for next year.
View our latest analysis for Edible Garden
After the latest results, the sole analyst covering Edible Garden are now predicting revenues of US$13.1m in 2023. If met, this would reflect a meaningful 14% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 40% to US$3.74. Before this earnings announcement, the analyst had been modelling revenues of US$13.2m and losses of US$3.34 per share in 2023. While this year's revenue estimates held steady, there was also a noticeable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The consensus price target fell 42% to US$7.00per share, with the analyst clearly concerned by ballooning losses.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Edible Garden'shistorical trends, as the 14% annualised revenue growth to the end of 2023 is roughly in line with the 17% annual revenue growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 2.8% per year. So although Edible Garden is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider 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 Edible Garden. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Edible Garden's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Edible Garden. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.
We don't want to rain on the parade too much, but we did also find 5 warning signs for Edible Garden (4 are a bit unpleasant!) that you need to be mindful of.
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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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