Bubs Australia Limited (ASX:BUB) just released its latest annual report and things are not looking great. It definitely looks like a negative result overall with revenues falling 19% short of analyst estimates at AU$60m. Statutory losses were AU$0.15 per share, 182% bigger than what the analysts expected. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Bubs Australia

Following the latest results, Bubs Australia's four analysts are now forecasting revenues of AU$80.0m in 2024. This would be a substantial 33% improvement in revenue compared to the last 12 months. Bubs Australia is also expected to turn profitable, with statutory earnings of AU$0.0064 per share. Before this earnings report, the analysts had been forecasting revenues of AU$78.8m and earnings per share (EPS) of AU$0.0054 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice gain to earnings per share expectations following these results.

There's been no major changes to the consensus price target of AU$0.18, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Bubs Australia, with the most bullish analyst valuing it at AU$0.23 and the most bearish at AU$0.10 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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. It's clear from the latest estimates that Bubs Australia's rate of growth is expected to accelerate meaningfully, with the forecast 33% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 20% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.5% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Bubs Australia to grow faster than the wider 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 Bubs Australia following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at AU$0.18, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Bubs Australia. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Bubs Australia going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - Bubs Australia has 5 warning signs we think you should be aware 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.