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Results: LifeVantage Corporation Delivered A Surprise Loss And Now Analysts Have New Forecasts
Last week, you might have seen that LifeVantage Corporation (NASDAQ:LFVN) released its first-quarter result to the market. The early response was not positive, with shares down 6.5% to US$4.72 in the past week. Revenues fell 8.3% short of expectations, at US$37m. Earnings correspondingly dipped, with LifeVantage reporting a statutory loss of US$0.02 per share, whereas the analysts had previously modelled a profit in this period. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the consensus from LifeVantage's three analysts is for revenues of US$156.1m in 2027, which would reflect a not inconsiderable 9.3% decline in revenue compared to the last year of performance. Per-share earnings are expected to swell 15% to US$0.25. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$165.5m and earnings per share (EPS) of US$0.20 in 2027. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the sizeable expansion in to the earnings per share numbers.
See our latest analysis for LifeVantage
The consensus price target fell 6.7% to US$7.00, with the analysts signalling that the weaker revenue outlook was a more powerful indicator than the upgraded EPS forecasts. 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 LifeVantage, with the most bullish analyst valuing it at US$9.00 and the most bearish at US$5.00 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 LifeVantage's past performance and to peers in the same industry. Over the past five years, revenues have declined around 1.4% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 12% decline in revenue until the end of 2027. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 4.3% annually. So while a broad number of companies are forecast to grow, unfortunately LifeVantage is expected to see its revenue affected worse than other companies in the industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards LifeVantage following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings per share are more important to value creation for shareholders. 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 in mind, we wouldn't be too quick to come to a conclusion on LifeVantage. Long-term earnings power is much more important than next year's profits. We have forecasts for LifeVantage going out to 2029, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with LifeVantage , and understanding these should be part of your investment process.
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