Today is shaping up negative for creditshelf Aktiengesellschaft (ETR:CSQ) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon. The stock price has risen 8.5% to €46.00 over the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.
Following the downgrade, the consensus from three analysts covering creditshelf is for revenues of €5.8m in 2020, implying a considerable 12% decline in sales compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to €3.45. Yet before this consensus update, the analysts had been forecasting revenues of €7.2m and losses of €3.07 per share in 2020. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with the forecast 12% revenue decline a notable change from historical growth of 45% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 24% annually for the foreseeable future. So it's pretty clear that creditshelf's revenues are expected to shrink slower than the wider industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on creditshelf, and a few readers might choose to steer clear of the stock.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple creditshelf analysts - going out to 2022, and you can see them 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.
If you decide to trade creditshelf, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account.
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 firstname.lastname@example.org.