In This Article:
The analysts might have been a bit too bullish on Gevo, Inc. (NASDAQ:GEVO), given that the company fell short of expectations when it released its quarterly results last week. Revenues missed expectations somewhat, coming in at US$4.5m, but statutory earnings fell catastrophically short, with a loss of US$0.07 some 21% larger than what the analysts had predicted. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Gevo after the latest results.
See our latest analysis for Gevo
Taking into account the latest results, the consensus forecast from Gevo's five analysts is for revenues of US$20.5m in 2024. This reflects a substantial 53% improvement in revenue compared to the last 12 months. Losses are expected to be contained, narrowing 17% from last year to US$0.26. Before this latest report, the consensus had been expecting revenues of US$21.0m and US$0.11 per share in losses. While next year's revenue estimates dropped there was also a massive increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
There was no major change to the consensus price target of US$4.52, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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. There are some variant perceptions on Gevo, with the most bullish analyst valuing it at US$14.00 and the most bearish at US$1.50 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that Gevo's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 41% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 50% a year over the past five years. What's also interesting is that our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue decline 0.2% annually for the foreseeable future. So it's pretty clear that Gevo is expected to grow faster than the wider industry.