Taboola.com Ltd. (NASDAQ:TBLA) Just Reported And Analysts Have Been Cutting Their Estimates

Taboola.com Ltd. (NASDAQ:TBLA) just released its latest quarterly results and things are looking bullish. Revenues and losses per share both beat expectations, with revenues of US$332m leading estimates by 3.2%. Statutory losses were somewhat smaller thanthe analysts expected, coming in at US$0.10 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Taboola.com

After the latest results, the seven analysts covering Taboola.com are now predicting revenues of US$1.50b in 2023. If met, this would reflect a credible 4.1% improvement in sales compared to the last 12 months. Losses are supposed to decline, shrinking 14% from last year to US$0.093. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.62b and losses of US$0.04 per share in 2023. While next year's revenue estimates dropped there was also a very substantial increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The consensus price target fell 23% to US$4.83, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Taboola.com at US$6.00 per share, while the most bearish prices it at US$3.50. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Taboola.com shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Taboola.com's revenue growth is expected to slow, with the forecast 3.3% annualised growth rate until the end of 2023 being well below the historical 11% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Taboola.com.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Taboola.com going out to 2024, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Taboola.com you should know about.

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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