The Enthusiast Gaming Holdings Inc. (TSE:EGLX) Analysts Have Been Trimming Their Sales Forecasts

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. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After the downgrade, the seven analysts covering Enthusiast Gaming Holdings are now predicting revenues of CA$214m in 2023. If met, this would reflect a modest 5.3% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CA$250m in 2023. It looks like forecasts have become a fair bit less optimistic on Enthusiast Gaming Holdings, given the substantial drop in revenue estimates.

View our latest analysis for Enthusiast Gaming Holdings

Notably, the analysts have cut their price target 16% to CA$3.43, suggesting concerns around Enthusiast Gaming Holdings' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Enthusiast Gaming Holdings at CA$3.75 per share, while the most bearish prices it at CA$3.00. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Enthusiast Gaming Holdings' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Enthusiast Gaming Holdings' revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 5.3% growth on an annualised basis. This is compared to a historical growth rate of 65% over the past three years. Compare this to the 18 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 4.6% per year. So it's pretty clear that, while Enthusiast Gaming Holdings' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also forecasting for revenues to grow at about the same rate as companies in the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Enthusiast Gaming Holdings' future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Enthusiast Gaming Holdings after today.

But wait - there's more! We have estimates for Enthusiast Gaming Holdings from its seven analysts out until 2025, and you can see them free on our platform here.

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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.