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SNDL Inc. (NASDAQ:SNDL) shareholders are probably feeling a little disappointed, since its shares fell 3.7% to US$2.06 in the week after its latest third-quarter results. Revenues of CA$238m beat expectations by a respectable 2.2%, although statutory losses per share increased. SNDL lost CA$0.07, which was 40% more than what the analysts had included in their models. 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 SNDL
After the latest results, the twin analysts covering SNDL are now predicting revenues of CA$955.1m in 2025. If met, this would reflect a modest 4.8% improvement in revenue compared to the last 12 months. Statutory losses are forecast to balloon 88% to CA$0.05 per share. Before this earnings report, the analysts had been forecasting revenues of CA$965.7m and earnings per share (EPS) of CA$0.01 in 2025. While the analysts have made no real change to their revenue estimates, we can see that the consensus is now modelling a loss next year - a clear dip in sentiment compared to the previous outlook of a profit.
The consensus price target held steady at US$3.63, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that SNDL's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.8% growth on an annualised basis. This is compared to a historical growth rate of 57% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% per year. Factoring in the forecast slowdown in growth, it seems obvious that SNDL is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts are expecting SNDL to become unprofitable next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. 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.