One Highwood Asset Management Ltd. (CVE:HAM) Analyst Just Made A Major Cut To Next Year's Estimates

The latest analyst coverage could presage a bad day for Highwood Asset Management Ltd. (CVE:HAM), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

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Following the downgrade, the most recent consensus for Highwood Asset Management from its solitary analyst is for revenues of CA$137m in 2025 which, if met, would be a decent 17% increase on its sales over the past 12 months. Statutory earnings per share are supposed to decline 19% to CA$1.65 in the same period. Previously, the analyst had been modelling revenues of CA$154m and earnings per share (EPS) of CA$2.00 in 2025. Indeed, we can see that the analyst is a lot more bearish about Highwood Asset Management's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Highwood Asset Management

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Highwood Asset Management's revenue growth is expected to slow, with the forecast 24% annualised growth rate until the end of 2025 being well below the historical 42% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.1% per year. So it's pretty clear that, while Highwood Asset Management's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Highwood Asset Management. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like the analyst has become a lot more bearish on Highwood Asset Management, and their negativity could be grounds for caution.

As you can see, the analyst clearly isn't bullish, and there might be good reason for that. We've identified some potential issues with Highwood Asset Management's financials, such as a weak balance sheet. Learn more, and discover the 3 other warning signs we've identified, for free on our platform here.

You can also see our analysis of Highwood Asset Management's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.