Analysts Just Slashed Their Focusrite plc (LON:TUNE) EPS Numbers

The latest analyst coverage could presage a bad day for Focusrite plc (LON:TUNE), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the four analysts covering Focusrite provided consensus estimates of UK£155m revenue in 2024, which would reflect a considerable 13% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to plummet 54% to UK£0.14 in the same period. Previously, the analysts had been modelling revenues of UK£182m and earnings per share (EPS) of UK£0.29 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

See our latest analysis for Focusrite

It'll come as no surprise then, to learn that the analysts have cut their price target 22% to UK£6.03.

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 13% by the end of 2024. This indicates a significant reduction from annual growth of 19% 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 4.6% per year. It's pretty clear that Focusrite's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Focusrite. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Focusrite's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Focusrite.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Focusrite analysts - going out to 2026, 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 that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.