Yahoo Finance Outbrain Inc. (NASDAQ:OB) Just Released Its Full-Year Earnings: Here's What Analysts Think
It's been a good week for Outbrain Inc. (NASDAQ:OB) shareholders, because the company has just released its latest annual results, and the shares gained 9.7% to US$4.87. It was a pretty bad result overall; while revenues were in line with expectations at US$992m, statutory losses exploded to US$0.44 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Outbrain
Following the latest results, Outbrain's five analysts are now forecasting revenues of US$1.01b in 2023. This would be a reasonable 2.2% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 51% to US$0.23. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.01b and losses of US$0.14 per share in 2023. While this year's revenue estimates held steady, there was also a very substantial increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
As a result, there was no major change to the consensus price target of US$6.17, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Outbrain analyst has a price target of US$8.00 per share, while the most pessimistic values it at US$4.00. 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.
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. It's pretty clear that there is an expectation that Outbrain's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 2.2% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.1% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Outbrain.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Outbrain. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Outbrain's revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$6.17, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Outbrain analysts - going out to 2025, and you can see them free on our platform here.
We also provide an overview of the Outbrain Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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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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