These Analysts Think Banxa Holdings Inc.'s (CVE:BNXA) Sales Are Under Threat

One thing we could say about the analysts on Banxa Holdings Inc. (CVE:BNXA) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the consensus from twin analysts covering Banxa Holdings is for revenues of AU$25m in 2021, implying an uneasy 18% decline in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of AU$29m in 2021. It looks like forecasts have become a fair bit less optimistic on Banxa Holdings, given the measurable cut to revenue estimates.

View our latest analysis for Banxa Holdings

Notably, the analysts have cut their price target 22% to AU$12.54, suggesting concerns around Banxa 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. Over the past three years, revenues have declined around 8.6% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 18% decline in revenue until the end of 2021. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 20% annually. So while a broad number of companies are forecast to grow, unfortunately Banxa Holdings is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Banxa Holdings this year. They also expect company revenue to perform worse than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Banxa Holdings' future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Banxa Holdings going forwards.

Looking to learn more? We have estimates for Banxa Holdings from its twin analysts out until 2023, 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 that insiders are buying.

When trading stocks or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.