The SoftwareONE Holding AG (VTX:SWON) Analysts Have Been Trimming Their Sales Forecasts

The latest analyst coverage could presage a bad day for SoftwareONE Holding AG (VTX:SWON), 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. Shares are up 7.0% to CHF13.50 in the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following the downgrade, the current forecast from SoftwareONE Holding's nine analysts is for revenues of CHF7.0b in 2022, which would reflect a major improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CHF8.0b in 2022. It looks like forecasts have become a fair bit less optimistic on SoftwareONE Holding, given the substantial drop in revenue estimates.

Check out our latest analysis for SoftwareONE Holding

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. It's clear from the latest estimates that SoftwareONE Holding's rate of growth is expected to accelerate meaningfully, with the forecast 6x annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 0.7% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 11% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that SoftwareONE Holding is expected to grow much faster than its 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 more rapid revenue growth than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on SoftwareONE Holding after today.

Want to learn more? At least one of SoftwareONE Holding's nine analysts has provided estimates out to 2024, which can be seen 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.

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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.