Innovid Corp. (NYSE:CTV) Analysts Just Trimmed Their Revenue Forecasts By 16%
The analysts covering Innovid Corp. (NYSE:CTV) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following this downgrade, Innovid's four analysts are forecasting 2023 revenues to be US$128m, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 42% to US$0.08. Yet before this consensus update, the analysts had been forecasting revenues of US$152m and losses of US$0.097 per share in 2023. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to this year's revenue estimates, while at the same time reducing their loss estimates.
See our latest analysis for Innovid
the analysts have cut their price target 24% to US$3.10 per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Innovid, with the most bullish analyst valuing it at US$5.00 and the most bearish at US$2.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. We would highlight that Innovid's revenue growth is expected to slow, with the forecast 0.3% annualised growth rate until the end of 2023 being well below the historical 27% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Innovid is also expected to grow slower than other industry participants.
The Bottom Line
Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Innovid's revenues are expected to grow slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Innovid going forwards.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Innovid analysts - going out to 2024, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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.
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