The Consensus EPS Estimates For Singulus Technologies AG (ETR:SNG) Just Fell Dramatically

The latest analyst coverage could presage a bad day for Singulus Technologies AG (ETR:SNG), 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) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the most recent consensus for Singulus Technologies from its two analysts is for revenues of €46m in 2020 which, if met, would be a notable 17% increase on its sales over the past 12 months. Losses are forecast to hold steady at around €3.45. However, before this estimates update, the consensus had been expecting revenues of €57m and €2.47 per share in losses. 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 Singulus Technologies

The consensus price target was broadly unchanged at €9.23, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Singulus Technologies at €10.50 per share, while the most bearish prices it at €7.95. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Singulus Technologies' past performance and to peers in the same industry. It's clear from the latest estimates that Singulus Technologies' rate of growth is expected to accelerate meaningfully, with the forecast 17% revenue growth noticeably faster than its historical growth of 0.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.9% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Singulus Technologies is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Singulus Technologies after the downgrade.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts 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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