Analysts Have Just Cut Their Ten Entertainment Group plc (LON:TEG) Revenue Estimates By 19%

The latest analyst coverage could presage a bad day for Ten Entertainment Group plc (LON:TEG), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the current consensus from Ten Entertainment Group's six analysts is for revenues of UK£49m in 2021 which - if met - would reflect a huge 34% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of UK£60m in 2021. The consensus view seems to have become more pessimistic on Ten Entertainment Group, noting the substantial drop in revenue estimates in this update.

Check out our latest analysis for Ten Entertainment Group

There was no particular change to the consensus price target of UK£2.62, with Ten Entertainment Group's latest outlook seemingly not enough to result in a change of valuation. 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. The most optimistic Ten Entertainment Group analyst has a price target of UK£3.10 per share, while the most pessimistic values it at UK£2.20. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Ten Entertainment Group shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ten Entertainment Group's past performance and to peers in the same industry. For example, we noticed that Ten Entertainment Group's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 34% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 0.7% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 13% per year. So it looks like Ten Entertainment Group is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Ten Entertainment Group this year. They're also forecasting more rapid revenue growth than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Ten Entertainment Group going forwards.

But wait - there's more! At least one of Ten Entertainment Group's six analysts has provided estimates out to 2023, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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