The latest analyst coverage could presage a bad day for Kuuhubb Inc. (CVE:KUU), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analyst signalled a weaker outlook – perhaps a sign that investors should temper their expectations as well.
Following the downgrade, the latest consensus from Kuuhubb’s one analyst is for revenues of US$20m in 2021, which would reflect a sizeable 139% improvement in sales compared to the last 12 months. Before the latest update, the analyst was foreseeing US$25m of revenue in 2021. It looks like forecasts have become a fair bit less optimistic on Kuuhubb, given the substantial drop in revenue estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It’s clear from the latest estimates that Kuuhubb’s rate of growth is expected to accelerate meaningfully, with the forecast 139% revenue growth noticeably faster than its historical growth of 14% p.a. 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 1.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Kuuhubb to grow faster than the wider industry.
The Bottom Line
The clear low-light was that the analyst slashing their revenue forecasts for Kuuhubb next year. They’re also forecasting more rapid revenue growth than the wider market. Given the stark change in sentiment, we’d understand if investors became more cautious on Kuuhubb after today.
As you can see, the analyst clearly isn’t bullish, and there might be good reason for that. We’ve identified some potential issues with Kuuhubb’s financials, such as a short cash runway. For more information, you can click here to discover this and the 1 other risk we’ve identified.
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