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The analysts covering Goodfood Market Corp. (TSE:FOOD) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
Following the latest downgrade, the two analysts covering Goodfood Market provided consensus estimates of CA$123m revenue in 2025, which would reflect a not inconsiderable 11% decline on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CA$145m in 2025. The consensus view seems to have become more pessimistic on Goodfood Market, noting the measurable cut to revenue estimates in this update.
View our latest analysis for Goodfood Market
Notably, the analysts have cut their price target 55% to CA$0.25, suggesting concerns around Goodfood Market's valuation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. Over the past five years, revenues have declined around 17% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 21% decline in revenue until the end of 2025. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 2.7% annually. So while a broad number of companies are forecast to grow, unfortunately Goodfood Market is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Goodfood Market this year. They also expect company revenue to perform worse than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Goodfood Market's future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Goodfood Market after today.
There might be good reason for analyst bearishness towards Goodfood Market, like dilutive stock issuance over the past year. For more information, you can click here to discover this and the 3 other risks we've identified.