One thing we could say about the covering analyst on Harte Gold Corp. (TSE:HRT) - 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 analyst signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Surprisingly the share price has been buoyant, rising 33% to CA$0.16 in the past 7 days. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.
Following the latest downgrade, the solo analyst covering Harte Gold provided consensus estimates of CA$45m revenue in 2020, which would reflect a painful 21% decline on its sales over the past 12 months. Prior to the latest estimates, the analyst was forecasting revenues of CA$79m in 2020. It looks like forecasts have become a fair bit less optimistic on Harte Gold, given the pretty serious reduction to revenue estimates.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with the forecast 21% revenue decline a notable change from historical growth of 596% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Harte Gold is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analyst cut their revenue estimates for this year. They're also anticipating slower revenue growth than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Harte Gold going forwards.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Harte Gold, including dilutive stock issuance over the past year. For more information, you can click here to discover this and the 4 other concerns we've identified.
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. 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.
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