LPKF Laser & Electronics AG (ETR:LPK) Analysts Just Trimmed Their Revenue Forecasts By 11%

Today is shaping up negative for LPKF Laser & Electronics AG (ETR:LPK) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the current consensus from LPKF Laser & Electronics' five analysts is for revenues of €139m in 2021 which - if met - would reflect a huge 36% increase on its sales over the past 12 months. Per-share earnings are expected to soar 174% to €0.60. Previously, the analysts had been modelling revenues of €156m and earnings per share (EPS) of €0.64 in 2021. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a substantial drop in revenue estimates and a minor downgrade to EPS estimates to boot.

See our latest analysis for LPKF Laser & Electronics

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that LPKF Laser & Electronics' rate of growth is expected to accelerate meaningfully, with the forecast 36% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 7.4% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect LPKF Laser & Electronics to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of LPKF Laser & Electronics going forwards.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple LPKF Laser & Electronics 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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