One Straker Limited (ASX:STG) Analyst Just Slashed Their 2025 Revenue Estimates

Today is shaping up negative for Straker Limited (ASX:STG) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the latest downgrade, the current consensus, from the solo analyst covering Straker, is for revenues of NZ$44m in 2025, which would reflect a definite 12% reduction in Straker's sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 56% to NZ$0.015. Yet prior to the latest estimates, the analyst had been forecasting revenues of NZ$53m and losses of NZ$0.014 per share in 2025. Ergo, there's been a clear change in sentiment, with the analyst administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for Straker

The consensus price target fell 57% to NZ$0.42, implicitly signalling that lower earnings per share are a leading indicator for Straker's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Straker's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 12% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 19% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.9% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Straker is expected to lag the wider industry.

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 Straker. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Straker's revenues are expected to grow slower than the wider market. The consensus price target fell measurably, with the analyst seemingly not reassured by recent business developments, leading to a lower estimate of Straker's future valuation. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Straker after today.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Straker going out as far as 2027, 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 with high insider ownership.

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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.