Charlotte's Web Holdings, Inc. (TSE:CWEB) just released its latest quarterly report and things are not looking great. It definitely looks like a negative result overall with revenues falling 14% short of analyst estimates at US$12m. Statutory losses were US$0.07 per share, 40% bigger than what the analysts 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Charlotte's Web Holdings after the latest results.

Check out our latest analysis for Charlotte's Web Holdings

Following the recent earnings report, the consensus from three analysts covering Charlotte's Web Holdings is for revenues of US$50.8m in 2024. This implies a measurable 6.9% decline in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 33% to US$0.19. Before this earnings announcement, the analysts had been modelling revenues of US$57.5m and losses of US$0.22 per share in 2024. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

The consensus price target fell 14% to CA$0.65, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses.

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. One more thing stood out to us about these estimates, and it's the idea that Charlotte's Web Holdings' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 13% to the end of 2024. This tops off a historical decline of 9.2% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 11% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Charlotte's Web Holdings to suffer worse than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, long term profitability is more important for the value creation process. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Charlotte's Web Holdings' future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Charlotte's Web Holdings analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 5 warning signs for Charlotte's Web Holdings that you need to be mindful of.

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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.