One Pantaflix AG (ETR:PAL) Analyst Is Reducing Their Forecasts For This Year

The latest analyst coverage could presage a bad day for Pantaflix AG (ETR:PAL), with the covering analyst 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 the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the consensus from solitary analyst covering Pantaflix is for revenues of €22m in 2022, implying a substantial 25% decline in sales compared to the last 12 months. Per-share losses are expected to explode, reaching €0.23 per share. Yet before this consensus update, the analyst had been forecasting revenues of €26m and losses of €0.20 per share in 2022. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Check out our latest analysis for Pantaflix

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. One more thing stood out to us about these estimates, and it's the idea that Pantaflix's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 25% to the end of 2022. This tops off a historical decline of 0.9% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 12% annually. So it's pretty clear that, while it does have declining revenues, the analyst also expect Pantaflix to suffer worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Pantaflix. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After a cut like that, investors could be forgiven for thinking the analyst is a lot more bearish on Pantaflix, and a few readers might choose to steer clear of the stock.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2024, which can be seen for 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.

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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.