As you might know, Thinkific Labs Inc. (TSE:THNC) recently reported its second-quarter numbers. The statutory results were mixed overall, with revenues of US$13m in line with analyst forecasts, but losses of US$0.13 per share, some 8.3% larger than the analysts were predicting. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Thinkific Labs' six analysts is for revenues of US$51.8m in 2022, which would reflect a notable 15% increase on its sales over the past 12 months. Losses are supposed to decline, shrinking 10% from last year to US$0.47. Before this earnings announcement, the analysts had been modelling revenues of US$52.4m and losses of US$0.47 per share in 2022.
The consensus price target was unchanged at CA$6.49, suggesting that the business - losses and all - is executing in line with estimates. 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 Thinkific Labs analyst has a price target of CA$10.10 per share, while the most pessimistic values it at CA$4.53. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Thinkific Labs' revenue growth is expected to slow, with the forecast 32% annualised growth rate until the end of 2022 being well below the historical 47% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 18% per year. So it's pretty clear that, while Thinkific Labs' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster 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.
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 Thinkific Labs analysts - going out to 2024, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Thinkific Labs that you should be aware of.
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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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