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Last week saw the newest second-quarter earnings release from Poshmark, Inc. (NASDAQ:POSH), an important milestone in the company’s journey to build a stronger business. Poshmark reported revenues of US$89m, in line with expectations, but it unfortunately also reported (statutory) losses of US$0.29 per share, which were slightly larger than expected. 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. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Poshmark
Following the latest results, Poshmark’s 14 analysts are now forecasting revenues of US$359.1m in 2022. This would be an okay 4.5% improvement in sales compared to the last 12 months. Losses are forecast to balloon 33% to US$1.00 per share. Before this earnings announcement, the analysts had been modelling revenues of US$361.0m and losses of US$0.93 per share in 2022. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although sales forecasts held steady, the consensus also made a modest increase to its losses per share forecasts.
The consensus price target held steady at US$14.09, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company’s valuation. 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. There are some variant perceptions on Poshmark, with the most bullish analyst valuing it at US$21.00 and the most bearish at US$11.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Poshmark’s past performance and to peers in the same industry. It’s pretty clear that there is an expectation that Poshmark’s revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 9.2% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past year. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 13% annually. So it’s pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Poshmark.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Poshmark going out to 2024, and you can see them free on our platform here.
And what about risks? Every company has them, and we’ve spotted 2 warning signs for Poshmark you should know about.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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