Noratis AG (ETR:NUVA) Analysts Just Slashed This Year's Estimates

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

After the downgrade, the consensus from Noratis' dual analysts is for revenues of €55m in 2024, which would reflect a considerable 8.8% decline in sales compared to the last year of performance. Per-share losses are expected to see a sharp uptick, reaching €1.68. Yet before this consensus update, the analysts had been forecasting revenues of €76m and losses of €0.50 per share in 2024. 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.

See our latest analysis for Noratis

The consensus price target fell 36% to €6.40, implicitly signalling that lower earnings per share are a leading indicator for Noratis' valuation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 8.8% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 1.3% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 16% per year. So it's pretty clear that Noratis' 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 such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Noratis.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Noratis' financials, such as dilutive stock issuance over the past year. Learn more, and discover the 2 other risks we've identified, 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 backed by insiders.

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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.

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