Time To Worry? Analysts Are Downgrading Their Mobotix AG (ETR:MBQ) Outlook

The latest analyst coverage could presage a bad day for Mobotix AG (ETR:MBQ), 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.

Following the downgrade, the consensus from dual analysts covering Mobotix is for revenues of €62m in 2021, implying a definite 16% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to plunge 77% to €0.08 in the same period. Before this latest update, the analysts had been forecasting revenues of €79m and earnings per share (EPS) of €0.29 in 2021. Indeed, we can see that the analysts are a lot more bearish about Mobotix's prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Mobotix

The consensus price target fell 28% to €6.50, with the weaker earnings outlook clearly leading analyst valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. Over the past five years, revenues have declined around 2.8% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 16% decline in revenue until the end of 2021. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 13% per year. So while a broad number of companies are forecast to grow, unfortunately Mobotix is expected to see its sales affected worse than other companies in the 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales 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 Mobotix.

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 Mobotix's business, like concerns around earnings quality. Learn more, and discover the 2 other flags 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 that insiders are buying.

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