It’s been a good week for Traeger, Inc. (NYSE:COOK) shareholders, because the company has just released its latest third-quarter results, and the shares gained 4.3% to US$3.87. Revenues of US$94m beat expectations by a respectable 9.0%, although statutory losses per share increased. Traeger lost US$1.75, which was 465% 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.
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Following the recent earnings report, the consensus from nine analysts covering Traeger is for revenues of US$653.2m in 2023, implying a noticeable 5.7% decline in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 87% to US$0.41. Before this earnings announcement, the analysts had been modelling revenues of US$692.6m and losses of US$0.36 per share in 2023. While next year’s revenue estimates dropped there was also a notable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The consensus price target fell 8.0% to US$4.29, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Traeger analyst has a price target of US$6.00 per share, while the most pessimistic values it at US$3.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 4.6% by the end of 2023. This indicates a significant reduction from annual growth of 20% over the last three years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 1.5% per year. So it’s pretty clear that Traeger’s revenues are expected to shrink faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately they also downgraded their revenue estimates, and our analysts estimates suggest that Traeger is still expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Traeger going out to 2024, and you can see them free on our platform here..
And what about risks? Every company has them, and we’ve spotted 4 warning signs for Traeger you should know about.
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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.