What You Need To Know About The GetNinjas S.A. (BVMF:NINJ3) Analyst Downgrade Today

The latest analyst coverage could presage a bad day for GetNinjas S.A. (BVMF:NINJ3), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After this downgrade, GetNinjas' four analysts are now forecasting revenues of R$130m in 2022. This would be a major 129% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of R$150m in 2022. The consensus view seems to have become more pessimistic on GetNinjas, noting the substantial drop in revenue estimates in this update.

View our latest analysis for GetNinjas

Notably, the analysts have cut their price target 6.8% to R$22.10, suggesting concerns around GetNinjas' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on GetNinjas, with the most bullish analyst valuing it at R$40.00 and the most bearish at R$9.00 per share. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the GetNinjas' past performance and to peers in the same industry. It's clear from the latest estimates that GetNinjas' rate of growth is expected to accelerate meaningfully, with the forecast 94% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 42% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that GetNinjas is expected to grow much faster than its industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for GetNinjas next year. They're also forecasting more rapid revenue growth than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. 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 GetNinjas after today.

Want to learn more? At least one of GetNinjas' four analysts has provided estimates out to 2023, which can be seen for 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.