The latest analyst coverage could presage a bad day for Wag! Group Co. (NASDAQ:PET), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
Following the downgrade, the most recent consensus for Wag! Group from its three analysts is for revenues of US$83m in 2025 which, if met, would be a decent 8.5% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 63% to US$0.12 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$104m and losses of US$0.055 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
See our latest analysis for Wag! Group
The consensus price target fell 30% to US$1.67, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.
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. We would highlight that Wag! Group's revenue growth is expected to slow, with the forecast 6.7% annualised growth rate until the end of 2025 being well below the historical 40% p.a. growth over the last three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 10% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Wag! Group.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Wag! Group.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Wag! Group's financials, such as recent substantial insider selling. For more information, you can click here to discover this and the 5 other flags we've identified.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.
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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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