The latest analyst coverage could presage a bad day for Iconovo AB (publ) (STO:ICO), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
Following the downgrade, the consensus from two analysts covering Iconovo is for revenues of kr12m in 2020, implying an uncomfortable 8.7% decline in sales compared to the last 12 months. Per-share losses are expected to explode, reaching kr2.06 per share. Yet before this consensus update, the analysts had been forecasting revenues of kr15m and losses of kr1.04 per share in 2020. So there’s been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
View our latest analysis for Iconovo
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would also point out that the forecast 8.7% revenue decline is better than the historical trend, which saw revenues shrink -34% annually 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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Iconovo’s revenues are expected to grow slower than the wider market. Given the serious cut to this year’s outlook, it’s clear that analysts have turned more bearish on Iconovo, and we wouldn’t blame shareholders for feeling a little more cautious themselves.
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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