The Arlo Technologies, Inc. (NYSE:ARLO) Third-Quarter Results Are Out And Analysts Have Published New Forecasts
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Shareholders of Arlo Technologies, Inc. (NYSE:ARLO) will be pleased this week, given that the stock price is up 16% to US$11.92 following its latest quarterly results. It was a pretty bad result overall; while revenues were in line with expectations at US$138m, statutory losses exploded to US$0.04 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Arlo Technologies
After the latest results, the five analysts covering Arlo Technologies are now predicting revenues of US$539.8m in 2025. If met, this would reflect a credible 2.9% improvement in revenue compared to the last 12 months. Arlo Technologies is also expected to turn profitable, with statutory earnings of US$0.033 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$564.0m and earnings per share (EPS) of US$0.20 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the US$17.80 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Arlo Technologies at US$24.00 per share, while the most bearish prices it at US$15.00. 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 Arlo Technologies shareholders.
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. It's pretty clear that there is an expectation that Arlo Technologies' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.3% growth on an annualised basis. This is compared to a historical growth rate of 8.2% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that Arlo Technologies is also expected to grow slower than other industry participants.