Analysts just slashed their Li-Cycle Holdings Corp EPS numbers. (NYSE:LICY)
The latest analyst coverage could portend a bad day for Li-Cycle Holdings Corp. (NYSE:LICY), with analysts making broad cuts to their statutory estimates that could leave shareholders a bit shocked. Both revenue and earnings per share (EPS) forecasts have been lowered as analysts see gray clouds on the horizon.
Following the downgrade, the current consensus of Li-Cycle Holdings’ seven analysts is for revenue of $136 million in 2023, which, if achieved, would reflect a significant increase in its sales over the past 12 months. . Losses are expected to drop significantly, narrowing by 78% to US$0.28. Yet, prior to the latest estimates, analysts were forecasting revenue of $185 million and losses of $0.20 per share in 2023. So there has been a shift in view after recent consensus updates, analysts making a serious cut. to their earnings forecasts while expecting an increase in losses per share.
See our latest analysis for Li-Cycle Holdings
The consensus price target fell 12% to US$10.11 as analysts were clearly concerned about the company following weaker revenue and earnings outlook. It might also be instructive to look at the range of analysts’ estimates, to gauge how different the outlier opinions are from the mean. There are a few variations in perception on Li-Cycle Holdings, with the most bullish analyst pricing it at US$13.00 and the most bearish at US$8.00 per share. This shows that there is still some diversity in the estimates, but analysts don’t seem to be entirely split on the stock as if it were a pass or fail situation.
Looking now at the big picture, one way to understand these forecasts is to see how they compare to past performance and industry growth estimates. It is clear from the latest estimates that Li-Cycle Holdings’ growth rate is set to accelerate significantly, with a forecast of 5x annualized revenue growth through the end of 2023 significantly faster than its historical growth of 103% per year for the past three years. Compare that with other companies in the same industry, which are expected to grow revenue by 6.9% annually. Taking into account the expected acceleration in revenues, it is quite clear that Li-Cycle Holdings should grow much faster than its industry.
The most important thing to remember is that analysts have raised their loss per share estimates for next year. Although analysts have lowered their earnings estimates, these forecasts still imply that earnings will outperform the broader market. With a serious reduction in expectations for next year and a falling price target, we wouldn’t be surprised if investors were wary of Li-Cycle Holdings.
Yet the company’s long-term outlook is far more relevant than next year’s earnings. We have estimates – from several Li-Cycle Holdings analysts – going out to 2024, and you can see them for free on our platform here.
Of course, see the management of the company invest large sums of money in a stock can be just as useful as knowing if analysts are lowering their estimates. So you can also search this free list of stocks that insiders buy.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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