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One thing we could say about the covering analyst on Waitr Holdings Inc. (NASDAQ:WTRH) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Investors however, have been notably more optimistic about Waitr Holdings recently, with the stock price up a magnificent 37% to US$0.41 in the past week. With such a sharp increase, it seems brokers may have seen something that is not yet being priced in by the wider market.
After the downgrade, the consensus from Waitr Holdings' one analyst is for revenues of US$141m in 2022, which would reflect a sizeable 23% decline in sales compared to the last year of performance. Prior to the latest estimates, the analyst was forecasting revenues of US$191m in 2022. The consensus view seems to have become more pessimistic on Waitr Holdings, noting the sizeable cut to revenue estimates in this update.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 23% by the end of 2022. This indicates a significant reduction from annual growth of 36% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 14% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Waitr Holdings is expected to lag the wider industry.
The Bottom Line
The clear low-light was that the analyst slashing their revenue forecasts for Waitr Holdings this year. They're also anticipating slower revenue growth than the wider market. After a cut like that, investors could be forgiven for thinking the analyst is a lot more bearish on Waitr Holdings, and a few readers might choose to steer clear of the stock.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Waitr Holdings, including dilutive stock issuance over the past year. Learn more, and discover the 4 other risks we've identified, for free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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.