Secure Energy Services Inc. (TSE:SES) Analysts Just Trimmed Their Revenue Forecasts By 13%

One thing we could say about the analysts on Secure Energy Services Inc. (TSE:SES) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Shares are up 7.7% to CA$8.67 in the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the latest downgrade, the four analysts covering Secure Energy Services provided consensus estimates of CA$1.5b revenue in 2024, which would reflect a sizeable 82% decline on its sales over the past 12 months. Before the latest update, the analysts were foreseeing CA$1.7b of revenue in 2024. The consensus view seems to have become more pessimistic on Secure Energy Services, noting the measurable cut to revenue estimates in this update.

View our latest analysis for Secure Energy Services

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 74% by the end of 2024. This indicates a significant reduction from annual growth of 28% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 12% per year. So it's pretty clear that Secure Energy Services' revenues are expected to shrink faster than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Secure Energy Services next year. Analysts also expect revenues to shrink faster than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Secure Energy Services going forwards.

A high debt burden combined with a downgrade of this magnitude always gives us some reason for concern, especially if these forecasts are just the first sign of a business downturn. See why we're concerned about Secure Energy Services' balance sheet by visiting our risks dashboard for free on our platform here.

We also provide an overview of the Secure Energy Services Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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