Some Analysts Just Cut Their Forsee Power Société anonyme (EPA:FORSE) Estimates

One thing we could say about the analysts on Forsee Power Société anonyme (EPA:FORSE) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After this downgrade, Forsee Power Société anonyme's twin analysts are now forecasting revenues of €94m in 2022. This would be a sizeable 30% improvement in sales compared to the last 12 months. Losses are presumed to reduce, shrinking 16% from last year to €0.60. However, before this estimates update, the consensus had been expecting revenues of €108m and €0.60 per share in losses. 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 making no real change to the loss per share numbers.

View our latest analysis for Forsee Power Société anonyme

The consensus price target fell 32% to €8.10, with the analysts clearly concerned about the weaker revenue outlook and expectation of ongoing losses. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Forsee Power Société anonyme, with the most bullish analyst valuing it at €11.70 and the most bearish at €4.50 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Forsee Power Société anonyme's rate of growth is expected to accelerate meaningfully, with the forecast 42% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 27% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Forsee Power Société anonyme is expected to grow much faster than its industry.

The Bottom Line

Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Forsee Power Société anonyme's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Forsee Power Société anonyme going forwards.

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 Forsee Power Société anonyme's business, like a short cash runway. For more information, you can click here to discover this and the 2 other risks we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks 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.