It’s been a mediocre week for RideNow Group, Inc. (NASDAQ:RDNW) shareholders, with the stock dropping 12% to US$4.70 in the week since its latest quarterly results. It looks like a pretty bad result, given that revenues fell 17% short of analyst estimates at US$244m, and the company reported a statutory loss of US$0.36 per share instead of the profit that the analysts had been forecasting. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the two analysts covering RideNow Group are now predicting revenues of US$1.15b in 2027. If met, this would reflect a meaningful 8.7% improvement in revenue compared to the last 12 months. RideNow Group is also expected to turn profitable, with statutory earnings of US$0.29 per share. Before this earnings report, the analysts had been forecasting revenues of US$1.19b and earnings per share (EPS) of US$0.24 in 2027. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company’s cost base, given the very substantial lift in to the earnings per share numbers.
See our latest analysis for RideNow Group
The consensus price target fell 21% to US$6.75, with the analysts signalling that the weaker revenue outlook was a more powerful indicator than the upgraded EPS forecasts.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the RideNow Group’s past performance and to peers in the same industry. One thing stands out from these estimates, which is that RideNow Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 6.9% annualised growth until the end of 2027. If achieved, this would be a much better result than the 1.3% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 6.0% per year. So it looks like RideNow Group is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards RideNow Group following these results. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Even so, earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of RideNow Group’s future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2028, which can be seen for free on our platform here.
That said, it’s still necessary to consider the ever-present spectre of investment risk. We’ve identified 2 warning signs with RideNow Group , and understanding them should be part of your investment process.
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