In This Article:
Market forces rained on the parade of Stryve Foods, Inc. (NASDAQ:SNAX) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
After the downgrade, the twin analysts covering Stryve Foods are now predicting revenues of US$43m in 2022. If met, this would reflect a major 44% improvement in sales compared to the last 12 months. Losses are supposed to balloon 28% to US$1.69 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$48m and losses of US$1.17 per share in 2022. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
See our latest analysis for Stryve Foods
The consensus price target fell 25% to US$3.00, implicitly signalling that lower earnings per share are a leading indicator for Stryve Foods' valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Stryve Foods analyst has a price target of US$4.00 per share, while the most pessimistic values it at US$2.00. 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 Stryve Foods' past performance and to peers in the same industry. We would highlight that Stryve Foods' revenue growth is expected to slow, with the forecast 44% annualised growth rate until the end of 2022 being well below the historical 77% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.8% per year. So it's pretty clear that, while Stryve Foods' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Stryve Foods. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Stryve Foods.