SHS VIVEON AG (ETR:SHWK) Analysts Just Cut Their EPS Forecasts Substantially

The analysts covering SHS VIVEON AG (ETR:SHWK) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from dual analysts covering SHS VIVEON is for revenues of €8.8m in 2022, implying a considerable 17% decline in sales compared to the last 12 months. Losses are supposed to balloon 255% to €1.22 per share. Yet before this consensus update, the analysts had been forecasting revenues of €10m and losses of €0.45 per share in 2022. 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.

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The consensus price target fell 44% to €6.70, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic SHS VIVEON analyst has a price target of €10.60 per share, while the most pessimistic values it at €6.80. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 SHS VIVEON's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 17% to the end of 2022. This tops off a historical decline of 3.7% a year over the past three years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 11% annually. So while a broad number of companies are forecast to grow, unfortunately SHS VIVEON is expected to see its sales affected worse than other companies in the 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 SHS VIVEON. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that SHS VIVEON's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of SHS VIVEON.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with SHS VIVEON's business, like dilutive stock issuance over the past year. For more information, you can click here to discover this and the 2 other risks we've identified.

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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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.