Last week, you might have seen that Despegar.com, Corp. (NYSE:DESP) released its first-quarter result to the market. The early response was not positive, with shares down 2.2% to US$8.79 in the past week. The results don't look great, especially considering that statutory losses grew 181% toUS$0.45 per share. Revenues of US$112m did beat expectations by 7.2%, but it looks like a bit of a cold comfort. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Despegar.com after the latest results.
Check out our latest analysis for Despegar.com
Taking into account the latest results, the most recent consensus for Despegar.com from four analysts is for revenues of US$494.9m in 2022 which, if met, would be a huge 29% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 86% to US$0.27. Before this earnings announcement, the analysts had been modelling revenues of US$518.7m and losses of US$0.21 per share in 2022. So it's pretty clear the analysts have mixed opinions on Despegar.com after this update; revenues were downgraded and per-share losses expected to increase.
There was no major change to the consensus price target of US$12.63, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Despegar.com, with the most bullish analyst valuing it at US$15.00 and the most bearish at US$10.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Despegar.com's past performance and to peers in the same industry. For example, we noticed that Despegar.com's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 41% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 16% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 14% annually. So it looks like Despegar.com is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Despegar.com. Long-term earnings power is much more important than next year's profits. We have forecasts for Despegar.com going out to 2024, and you can see them free on our platform here.
Even so, be aware that Despegar.com is showing 1 warning sign in our investment analysis , you should know about...
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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.
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Analysts Are Updating Their Despegar.com, Corp. (NYSE:DESP) Estimates After Its First-Quarter Results - Yahoo Finance
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