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Need To Know: The Consensus Just Cut Its SmartRent, Inc. (NYSE:SMRT) Estimates For 2022

The analysts covering SmartRent, Inc. (NYSE:SMRT) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the most recent consensus for SmartRent from its eight analysts is for revenues of US$188m in 2022 which, if met, would be a major 25% increase on its sales over the past 12 months. Losses are forecast to narrow 6.1% to US$0.48 per share. However, before this estimates update, the consensus had been expecting revenues of US$241m and US$0.38 per share in losses. 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.

Check out our latest analysis for SmartRent

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The consensus price target fell 8.9% to US$6.22, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic SmartRent analyst has a price target of US$8.00 per share, while the most pessimistic values it at US$4.90. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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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 SmartRent's revenue growth is expected to slow, with the forecast 57% annualised growth rate until the end of 2022 being well below the historical 111% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.0% annually. So it's pretty clear that, while SmartRent's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of SmartRent's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of SmartRent going forwards.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple SmartRent analysts - going out to 2024, and you can see them free on our platform here.

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 that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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