GOOD) After Its First-Quarter Report

Investors in Gladstone Commercial Corporation (NASDAQ:GOOD) had a good week, as its shares rose 7.5% to close at US$14.58 following the release of its quarterly results. It was a credible result overall, with revenues of US$36m and statutory earnings per share of US$0.01 both in line with analyst estimates, showing that Gladstone Commercial is executing in line with expectations. 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. Readers will be glad to know we’ve aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Gladstone Commercial after the latest results.

See our latest analysis for Gladstone Commercial



Following last week’s earnings report, Gladstone Commercial’s four analysts are forecasting 2024 revenues to be US$144.2m, approximately in line with the last 12 months. Statutory losses are forecast to balloon 79% to US$0.04 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$146.1m and earnings per share (EPS) of US$0.015 in 2024. So despite reconfirming their revenue estimates, the analysts are now forecasting a loss instead of a profit, which looks like a definite drop in sentiment following the latest results.

The consensus price target held steady at US$14.25, 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 Gladstone Commercial at US$15.50 per share, while the most bearish prices it at US$12.50. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. We would highlight that revenue is expected to reverse, with a forecast 2.3% annualised decline to the end of 2024. That is a notable change from historical growth of 6.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.8% annually for the foreseeable future. It’s pretty clear that Gladstone Commercial’s revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts are expecting Gladstone Commercial to become unprofitable next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. We have forecasts for Gladstone Commercial going out to 2026, and you can see them free on our platform here.

Even so, be aware that Gladstone Commercial is showing 2 warning signs in our investment analysis , you should know about…

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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.

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