Need To Know: The Consensus Just Cut Its Kalray S.A. (EPA:ALKAL) Estimates For 2022

The latest analyst coverage could presage a bad day for Kalray S.A. (EPA:ALKAL), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the latest consensus from Kalray's two analysts is for revenues of €16m in 2022, which would reflect a major 69% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing €20m of revenue in 2022. The consensus view seems to have become more pessimistic on Kalray, noting the measurable cut to revenue estimates in this update.

See our latest analysis for Kalray

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Kalray's rate of growth is expected to accelerate meaningfully, with the forecast 69% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 14% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Kalray is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. Analysts also expect revenues to grow faster than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Kalray after today.

Unanswered questions? At least one of Kalray's two analysts has provided estimates out to 2024, which can be seen for 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 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.