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Today is shaping up negative for SmartRent, Inc. (NYSE:SMRT) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
After the downgrade, the consensus from SmartRent's four analysts is for revenues of US$191m in 2025, which would reflect a small 4.5% decline in sales compared to the last year of performance. Losses are predicted to fall substantially, shrinking 90% to US$0.013 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$215m and losses of US$0.05 per share in 2025. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year's revenue estimates, while at the same time reducing their loss estimates.
See our latest analysis for SmartRent
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. We would highlight that sales are expected to reverse, with a forecast 3.6% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 32% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - SmartRent is expected to lag the wider industry.
The Bottom Line
Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that SmartRent's revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of SmartRent going forwards.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for SmartRent going out to 2026, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.
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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.