Analysts Are More Bearish On Enthusiast Gaming Holdings Inc. (TSE:EGLX) Than They Used To Be

The latest analyst coverage could presage a bad day for Enthusiast Gaming Holdings Inc. (TSE:EGLX), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Following this downgrade, Enthusiast Gaming Holdings' three analysts are forecasting 2025 revenues to be CA$72m, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 98% to CA$0.01 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of CA$83m and losses of CA$0.0033 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Check out our latest analysis for Enthusiast Gaming Holdings

The consensus price target fell 20% to CA$0.30, implicitly signalling that lower earnings per share are a leading indicator for Enthusiast Gaming Holdings' valuation.

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. We would highlight that sales are expected to reverse, with a forecast 1.4% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 18% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 10% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Enthusiast Gaming Holdings is expected to lag the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Enthusiast Gaming Holdings. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Enthusiast Gaming Holdings' revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Enthusiast Gaming Holdings.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Enthusiast Gaming Holdings analysts - going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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.