Need To Know: The Consensus Just Cut Its Syrah Resources Limited (ASX:SYR) Estimates For 2024

The analysts covering Syrah Resources Limited (ASX:SYR) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Investors however, have been notably more optimistic about Syrah Resources recently, with the stock price up an impressive 10% to AU$0.54 in the past week. With such a sharp increase, it seems brokers may have seen something that is not yet being priced in by the wider market.

Following the downgrade, the current consensus from Syrah Resources' three analysts is for revenues of US$96m in 2024 which - if met - would reflect a substantial 102% increase on its sales over the past 12 months. Losses are expected to increase slightly, to US$0.11 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$120m and losses of US$0.11 per share in 2024. 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 making no real change to the loss per share numbers.

See our latest analysis for Syrah Resources

There was no real change to the consensus price target of AU$0.88, suggesting that the revisions to revenue estimates are not expected to have a long-term impact on Syrah Resources' valuation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Syrah Resources' rate of growth is expected to accelerate meaningfully, with the forecast 102% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 23% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 0.2% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Syrah Resources is expected to grow much faster than its industry.

The Bottom Line

Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Syrah Resources after today.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Syrah Resources analysts - going out to 2026, and you can see them 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. 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.