Yahoo Finance WeCommerce Holdings Ltd. Just Missed Earnings; Here's What Analysts Are Forecasting Now
WeCommerce Holdings Ltd. (CVE:WE) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues came in at CA$21m, in line with estimates, while WeCommerce Holdings reported a statutory loss of CA$0.18 per share, well short of prior analyst forecasts for a profit. Following the result, the analyst has updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.
See our latest analysis for WeCommerce Holdings
Taking into account the latest results, the current consensus from WeCommerce Holdings' sole analyst is for revenues of CA$41.9m in 2021, which would reflect a major 97% increase on its sales over the past 12 months. WeCommerce Holdings is also expected to turn profitable, with statutory earnings of CA$0.19 per share. Yet prior to the latest earnings, the analyst had been anticipated revenues of CA$42.8m and earnings per share (EPS) of CA$0.11 in 2021. Although the analyst has lowered their sales forecasts, they've also made a sizeable expansion in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.
The analyst has cut their price target 12% to CA$23.00per share, suggesting that the declining revenue was a more crucial indicator than the expected improvement in earnings.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the WeCommerce Holdings' past performance and to peers in the same industry. It's clear from the latest estimates that WeCommerce Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 97% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 40% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 21% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that WeCommerce Holdings is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analyst upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards WeCommerce Holdings following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Yet - earnings are more important to the intrinsic value of the business. Furthermore, the analyst 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 WeCommerce Holdings. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2022, 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 1 warning sign for WeCommerce Holdings that you need to be mindful of.
This article by Simply Wall St is general in nature. 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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