Analyst Forecasts Just Got A Lot More Bearish On Remedy Entertainment Oyj (HEL:REMEDY)

The analysts covering Remedy Entertainment Oyj (HEL:REMEDY) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

After this downgrade, Remedy Entertainment Oyj's four analysts are now forecasting revenues of €55m in 2024. This would be a huge 47% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 77% to €0.16 per share. Prior to this update, the analysts had been forecasting revenues of €64m and earnings per share (EPS) of €0.66 in 2024. There looks to have been a major change in sentiment regarding Remedy Entertainment Oyj's prospects, with a measurable cut to revenues and the analysts now forecasting a loss instead of a profit.

Check out our latest analysis for Remedy Entertainment Oyj

The consensus price target fell 8.7% to €21.67, implicitly signalling that lower earnings per share are a leading indicator for Remedy Entertainment Oyj's valuation.

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. The analysts are definitely expecting Remedy Entertainment Oyj's growth to accelerate, with the forecast 36% annualised growth to the end of 2024 ranking favourably alongside historical growth of 14% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.9% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Remedy Entertainment Oyj to grow faster than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Remedy Entertainment Oyj dropped from profits to a loss next year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform 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 Remedy Entertainment Oyj.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Remedy Entertainment Oyj analysts - going out to 2026, 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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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.