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As you might know, Lavoro Limited (NASDAQ:LVRO) last week released its latest first-quarter, and things did not turn out so great for shareholders. Revenues missed expectations somewhat, coming in at R$1.9b, but statutory earnings fell catastrophically short, with a loss of R$2.04 some 29% larger than what the analysts had predicted. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for Lavoro
Following the recent earnings report, the consensus from two analysts covering Lavoro is for revenues of R$7.04b in 2025. This implies a stressful 22% decline in revenue compared to the last 12 months. Losses are forecast to balloon 32% to R$10.69 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of R$8.65b and losses of R$7.69 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.
There was no major change to the consensus price target of US$5.50, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.
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. One more thing stood out to us about these estimates, and it's the idea that Lavoro's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 29% to the end of 2025. This tops off a historical decline of 3.7% a year over the past year. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.4% annually. So while a broad number of companies are forecast to grow, unfortunately Lavoro is expected to see its revenue affected worse than other companies in the industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Lavoro. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.