One of the biggest stories of last week was how Snail, Inc. (NASDAQ:SNAL) shares plunged 35% in the week since its latest second-quarter results, closing yesterday at US$2.97. Revenues fell badly short of expectations, with revenue of US$20m missing analyst predictions by 32%. Statutory earnings correspondingly nosedived, with Snail reporting a loss of US$0.36 per share, where the analyst was expecting a profit. Following the result, the analyst has 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. So we collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.

Taking into account the latest results, the most recent consensus for Snail from lone analyst is for revenues of US$99.5m in 2026. If met, it would imply a decent 16% increase on its revenue over the past 12 months. Snail is also expected to turn profitable, with statutory earnings of US$0.48 per share. Yet prior to the latest earnings, the analyst had been anticipated revenues of US$100.3m and earnings per share (EPS) of US$0.66 in 2026. The analyst seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.

The consensus price target held steady at US$17.50, with the analyst seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future.

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. The analyst is definitely expecting Snail's growth to accelerate, with the forecast 34% annualised growth to the end of 2026 ranking favourably alongside historical growth of 17% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.2% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Snail to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Snail. 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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for Snail going out as far as 2027, and you can see them free on our platform here.

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.