These Analysts Just Made An Downgrade To Their Molten Ventures Plc (LON:GROW) EPS Forecasts

One thing we could say about the analysts on Molten Ventures Plc (LON:GROW) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from dual analysts covering Molten Ventures is for revenues of UK£170m in 2023, implying a stressful 52% decline in sales compared to the last 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of UK£0.066 per share in 2023. Prior to this update, the analysts had been forecasting revenues of UK£255m and earnings per share (EPS) of UK£1.55 in 2023. So we can see that the consensus has become notably more bearish on Molten Ventures' outlook with these numbers, making a sizeable cut to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

See our latest analysis for Molten Ventures

There was no major change to the consensus price target of UK£10.58, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Molten Ventures analyst has a price target of UK£13.00 per share, while the most pessimistic values it at UK£9.11. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 52% by the end of 2023. This indicates a significant reduction from annual growth of 46% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 1.9% annually for the foreseeable future. So it's pretty clear that Molten Ventures' revenues are expected to shrink faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts are expecting Molten Ventures to become unprofitable this year. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that Molten Ventures revenue is expected to perform worse than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Molten Ventures.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Molten Ventures, including concerns around earnings quality. For more information, you can click here to discover this and the 1 other warning sign we've identified.

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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.