What You Need To Know About The Home Consortium Limited (ASX:HMC) Analyst Downgrade Today

One thing we could say about the analysts on Home Consortium Limited (ASX:HMC) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. Shares are up 9.1% to AU$7.93 in the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the downgrade, the consensus from four analysts covering Home Consortium is for revenues of AU$74m in 2022, implying a measurable 6.6% decline in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing AU$66m of revenue in 2022. The consensus has definitely become more optimistic, showing a solid increase in revenue forecasts.

View our latest analysis for Home Consortium

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 6.6% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 26% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 4.2% annually for the foreseeable future. So it's pretty clear that Home Consortium's revenues are expected to shrink faster than the wider industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Home Consortium this year. The analysts also expect revenues to shrink faster than the wider market. 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 Home Consortium after today.

Looking for more information? We have estimates for Home Consortium from its four analysts out until 2024, 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.