Time To Worry? Analysts Just Downgraded Their WithSecure Oyj (HEL:FSC1V) Outlook

One thing we could say about the analysts on WithSecure Oyj (HEL:FSC1V) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After the downgrade, the consensus from WithSecure Oyj's three analysts is for revenues of €213m in 2022, which would reflect an uncomfortable 10% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of €248m in 2022. The consensus view seems to have become more pessimistic on WithSecure Oyj, noting the measurable cut to revenue estimates in this update.

See our latest analysis for WithSecure Oyj

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. We would highlight that sales are expected to reverse, with a forecast 14% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 6.8% 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 18% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - WithSecure Oyj is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also anticipating slower revenue growth than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on WithSecure Oyj, and a few readers might choose to steer clear of the stock.

Want to learn more? We have estimates for WithSecure Oyj from its three analysts out until 2024, 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.