Newsflash: Forsee Power Société anonyme (EPA:FORSE) Analysts Have Been Trimming Their Revenue Forecasts

Market forces rained on the parade of Forsee Power Société anonyme (EPA:FORSE) shareholders today, when the analysts downgraded their forecasts for next year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. At €2.68, shares are up 4.7% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

After this downgrade, Forsee Power Société anonyme's two analysts are now forecasting revenues of €210m in 2024. This would be a sizeable 50% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 64% to €0.20 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of €236m and losses of €0.18 per share in 2024. 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.

View our latest analysis for Forsee Power Société anonyme

The consensus price target fell 9.1% to €5.00, implicitly signalling that lower earnings per share are a leading indicator for Forsee Power Société anonyme's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Forsee Power Société anonyme's past performance and to peers in the same industry. We would highlight that Forsee Power Société anonyme's revenue growth is expected to slow, with the forecast 38% annualised growth rate until the end of 2024 being well below the historical 65% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.1% annually. So it's pretty clear that, while Forsee Power Société anonyme's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for next year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Forsee Power Société anonyme going forwards.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2025, which can be seen 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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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.