Analysts Just Shaved Their Fermentalg SA (EPA:ALGAE) Forecasts Dramatically

The analysts covering Fermentalg SA (EPA:ALGAE) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon. The stock price has risen 4.9% to €0.52 over the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

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Following this downgrade, Fermentalg's dual analysts are forecasting 2025 revenues to be €13m, approximately in line with the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 24% to €0.097. Yet prior to the latest estimates, the analysts had been forecasting revenues of €17m and losses of €0.08 per share in 2025. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out our latest analysis for Fermentalg

The consensus price target fell 6.6% to €0.71, implicitly signalling that lower earnings per share are a leading indicator for Fermentalg'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 Fermentalg's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Fermentalg's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.2% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.3% per year. Factoring in the forecast slowdown in growth, it seems obvious that Fermentalg is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Fermentalg's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Fermentalg.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Fermentalg going out as far as 2027, and you can see them free on our platform here.

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 with high insider ownership.

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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.