Shaver Shop Group Limited (ASX:SSG) Analysts Are Reducing Their Forecasts For This Year

The analysts covering Shaver Shop Group Limited (ASX:SSG) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon. At AU$1.16, shares are up 5.5% in the past 7 days. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following this downgrade, Shaver Shop Group's three analysts are forecasting 2024 revenues to be AU$229m, approximately in line with the last 12 months. Statutory earnings per share are supposed to reduce 5.4% to AU$0.12 in the same period. Before this latest update, the analysts had been forecasting revenues of AU$262m and earnings per share (EPS) of AU$0.15 in 2024. Indeed, we can see that the analysts are a lot more bearish about Shaver Shop Group's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Shaver Shop Group

Despite the cuts to forecast earnings, there was no real change to the AU$1.31 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Shaver Shop Group's revenue growth is expected to slow, with the forecast 1.8% annualised growth rate until the end of 2024 being well below the historical 8.3% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.4% annually. Factoring in the forecast slowdown in growth, it seems obvious that Shaver Shop Group is also expected to grow slower than other industry participants.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Shaver Shop Group. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Shaver Shop Group's revenues are expected to grow slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Shaver Shop Group after the downgrade.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Shaver Shop Group 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.