US$5.40 - That's What Analysts Think Greenlane Holdings, Inc. (NASDAQ:GNLN) Is Worth After These Results

It's been a pretty great week for Greenlane Holdings, Inc. (NASDAQ:GNLN) shareholders, with its shares surging 12% to US$3.86 in the week since its latest first-quarter results. Revenues of US$34m beat expectations by a respectable 4.1%, although statutory losses per share increased. Greenlane Holdings lost US$0.43, which was 169% more than what the analysts had included in their models. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Greenlane Holdings

Taking into account the latest results, the five analysts covering Greenlane Holdings provided consensus estimates of US$133.4m revenue in 2020, which would reflect a sizeable 21% decline on its sales over the past 12 months. The company is forecast to report a statutory loss of US$0.63 in 2020, a sharp decline from a profit over the last year. Before this earnings announcement, the analysts had been modelling revenues of US$134.7m and losses of US$0.51 per share in 2020. While this year's revenue estimates held steady, there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

Despite expectations of heavier losses next year,the analysts have lifted their price target 13% to US$5.40, perhaps implying these losses are not expected to be recurring over the long term. 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. The most optimistic Greenlane Holdings analyst has a price target of US$8.00 per share, while the most pessimistic values it at US$4.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. Over the past year, revenues have declined around 9.0% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for a 21% decline in revenue next year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.4% per year. So while a broad number of companies are forecast to decline, unfortunately Greenlane Holdings is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Greenlane Holdings' revenues are expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Greenlane Holdings going out to 2021, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Greenlane Holdings (1 shouldn't be ignored!) that we have uncovered.

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