One Guanajuato Silver Company Ltd. (CVE:GSVR) Analyst Just Slashed Their Estimates By A Substantial 41%

The analyst covering Guanajuato Silver Company Ltd. (CVE:GSVR) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. Revenue estimates were cut sharply as the analyst signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Investors however, have been notably more optimistic about Guanajuato Silver recently, with the stock price up a worthy 21% to CA$0.34 in the past week. With such a sharp increase, it seems brokers may have seen something that is not yet being priced in by the wider market.

After this downgrade, Guanajuato Silver's solitary analyst is now forecasting revenues of US$70m in 2024. This would be a decent 8.1% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analyst was forecasting revenues of US$118m in 2024. It looks like forecasts have become a fair bit less optimistic on Guanajuato Silver, given the pretty serious reduction to revenue estimates.

Check out our latest analysis for Guanajuato Silver

We'd point out that there was no major changes to their price target of CA$0.83, suggesting the latest estimates were not enough to shift their view on the value of the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Guanajuato Silver's past performance and to peers in the same industry. We would highlight that Guanajuato Silver's revenue growth is expected to slow, with the forecast 6.5% annualised growth rate until the end of 2024 being well below the historical 87% 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 13% annually. Factoring in the forecast slowdown in growth, it seems obvious that Guanajuato Silver is also expected to grow slower than other industry participants.

The Bottom Line

The clear low-light was that the analyst slashing their revenue forecasts for Guanajuato Silver next year. They also expect company revenue to perform worse than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Guanajuato Silver going forwards.

As you can see, this broker clearly isn't bullish, and there might be good reason for that. We've identified some potential issues with Guanajuato Silver's financials, such as dilutive stock issuance over the past year. Learn more, and discover the 3 other risks we've identified, 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.