One Carbon Revolution Limited (ASX:CBR) Analyst Has Been Cutting Their Forecasts

The latest analyst coverage could presage a bad day for Carbon Revolution Limited (ASX:CBR), 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.

After this downgrade, Carbon Revolution's one analyst is now forecasting revenues of AU$57m in 2023. This would be a major 41% improvement in sales compared to the last 12 months. Before the latest update, the analyst was foreseeing AU$66m of revenue in 2023. It looks like forecasts have become a fair bit less optimistic on Carbon Revolution, given the substantial drop in revenue estimates.

Our analysis indicates that CBR is potentially overvalued!

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 Carbon Revolution's rate of growth is expected to accelerate meaningfully, with the forecast 41% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 24% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 10% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Carbon Revolution to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst cut their revenue estimates for this year. They're also forecasting more rapid revenue growth than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Carbon Revolution going forwards.

Unanswered questions? We have forecasts for Carbon Revolution from one covering analyst, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.