Some Analysts Just Cut Their Cancom SE (ETR:COK) Estimates

One thing we could say about the analysts on Cancom SE (ETR:COK) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After the downgrade, the consensus from Cancom's seven analysts is for revenues of €1.4b in 2021, which would reflect a chunky 14% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to decrease 7.9% to €1.48 in the same period. Prior to this update, the analysts had been forecasting revenues of €1.8b and earnings per share (EPS) of €1.48 in 2021. Indeed we can see that the consensus opinion has undergone some fundamental changes following the recent consensus updates, with a pretty serious reduction to revenues and some minor tweaks to earnings numbers.

Check out our latest analysis for Cancom

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 18% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 13% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.0% per year. It's pretty clear that Cancom's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Cancom's revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Cancom going forwards.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Cancom analysts - going out to 2025, and you can see them 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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