Today is shaping up negative for Iconovo AB (publ) (STO:ICO) shareholders, with the analysts delivering a substantial negative revision to this year’s forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business. At kr52.60, shares are up 4.4% in the past 7 days. Investors could be forgiven for changing their mind on the business following the downgrade; but it’s not clear if the revised forecasts will lead to selling activity.
Following the latest downgrade, the twin analysts covering Iconovo provided consensus estimates of kr12m revenue in 2020, which would reflect a definite 8.7% decline on its sales over the past 12 months. Per-share losses are expected to explode, reaching kr2.06 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of kr15m and losses of kr1.04 per share in 2020. Ergo, there’s been a clear change in sentiment, with the analysts administering a notable cut to this year’s revenue estimates, while at the same time increasing their loss per share forecasts.
Check out our latest analysis for Iconovo
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. One thing that stands out from these estimates is that shrinking revenues are expected to moderate from the historical decline of 34% per annum over the past year.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Iconovo. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We wouldn’t be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Iconovo, and their negativity could be grounds for caution.
Still, the long-term prospects of the business are much more relevant than next year’s earnings. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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This article by Simply Wall St is general in nature. 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. Thank you for reading.
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