It's been a sad week for Weave Communications, Inc. (NYSE:WEAV), who've watched their investment drop 18% to US$14.26 in the week since the company reported its annual result. Weave Communications reported revenues of US$204m, in line with expectations, but it unfortunately also reported (statutory) losses of US$0.40 per share, which were slightly larger than 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Weave Communications

Taking into account the latest results, the most recent consensus for Weave Communications from seven analysts is for revenues of US$235.3m in 2025. If met, it would imply a solid 15% increase on its revenue over the past 12 months. Per-share losses are predicted to creep up to US$0.40. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$235.7m and losses of US$0.36 per share in 2025. So it's pretty clear the analysts have mixed opinions on Weave Communications even after this update; although they reconfirmed their revenue numbers, it came at the cost of a noticeable increase in per-share losses.

The consensus price target held steady at US$17.43, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company'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. Currently, the most bullish analyst values Weave Communications at US$20.00 per share, while the most bearish prices it at US$15.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Weave Communications is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Weave Communications' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 15% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% annually. Factoring in the forecast slowdown in growth, it looks like Weave Communications is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Weave Communications. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$17.43, 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 Weave Communications. 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 Weave Communications going out to 2027, and you can see them free on our platform here..

It is also worth noting that we have found 2 warning signs for Weave Communications that you need to take into consideration.

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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.