Yahoo Finance LiveOne, Inc. (NASDAQ:LVO) Just Reported Earnings, And Analysts Cut Their Target Price
LiveOne, Inc. (NASDAQ:LVO) defied analyst predictions to release its yearly results, which were ahead of market expectations. LiveOne beat expectations with revenues of US$117m arriving 2.7% ahead of forecasts. The company also reported a statutory loss of US$0.56, 3.4% smaller than was expected. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for LiveOne
Taking into account the latest results, the consensus forecast from LiveOne's four analysts is for revenues of US$131.3m in 2023, which would reflect a solid 12% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 66% to US$0.18. Before this latest report, the consensus had been expecting revenues of US$132.2m and US$0.35 per share in losses. Although the revenue estimates have not really changed LiveOne'sfuture looks a little different to the past, with a very promising decrease in the loss per share forecasts in particular.
The consensus price target fell 7.7% to US$6.00despite the forecast for smaller losses next year. It looks like the ongoing lack of profitability is starting to weigh on valuations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on LiveOne, with the most bullish analyst valuing it at US$7.00 and the most bearish at US$5.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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 LiveOne's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2023 being well below the historical 53% p.a. growth over the last five years. Compare this to the 143 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 11% per year. So it's pretty clear that, while LiveOne's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of LiveOne's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on LiveOne. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for LiveOne going out to 2024, and you can see them free on our platform here..
Before you take the next step you should know about the 6 warning signs for LiveOne (2 are a bit concerning!) that we have uncovered.
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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.
