Need To Know: This Analyst Just Made A Substantial Cut To Their VEOM Group (EPA:ALVG) Estimates

Market forces rained on the parade of VEOM Group (EPA:ALVG) shareholders today, when the covering analyst downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously. At €0.23, shares are up 6.0% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the latest downgrade, the solo analyst covering VEOM Group provided consensus estimates of €23m revenue in 2024, which would reflect a perceptible 6.9% decline on its sales over the past 12 months. Per-share losses are expected to explode, reaching €0.36 per share. Yet prior to the latest estimates, the analyst had been forecasting revenues of €27m and losses of €0.32 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for VEOM Group

The consensus price target fell 40% to €0.30, with the analyst clearly concerned about the company following the weaker revenue and earnings outlook.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 6.9% by the end of 2024. This indicates a significant reduction from annual growth of 1.4% 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. It's pretty clear that VEOM Group's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at VEOM Group. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that VEOM Group's revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

That said, the covering analyst might have good reason to be negative on VEOM Group, given major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 1 other risk 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 with high insider ownership.

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