Shareholders of Inuvo, Inc. (NYSEMKT:INUV) will be pleased this week, given that the stock price is up 16% to US$1.68 following its latest yearly results. It was a respectable set of results; while revenues of US$45m were in line with analyst predictions, statutory losses were 14% smaller than expected, with Inuvo losing US$0.09 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from Inuvo's two analysts is for revenues of US$53.8m in 2021, which would reflect a substantial 20% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 42% to US$0.055. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$53.8m and losses of US$0.055 per share in 2021.
The consensus price target rose 27% to US$1.75, with the analysts increasing their valuations as the business executes in line with forecasts.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Inuvo's past performance and to peers in the same industry. For example, we noticed that Inuvo's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 20%, well above its historical decline of 6.9% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 14% per year. Not only are Inuvo's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
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. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Inuvo going out as far as 2022, and you can see them free on our platform here.
You still need to take note of risks, for example - Inuvo has 2 warning signs (and 1 which is a bit concerning) we think you should know about.
This article by Simply Wall St is general in nature. 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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