Newsflash: Petra Diamonds Limited (LON:PDL) Analysts Have Been Trimming Their Revenue Forecasts

Today is shaping up negative for Petra Diamonds Limited (LON:PDL) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. 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 most recent consensus for Petra Diamonds from its four analysts is for revenues of US$349m in 2024 which, if met, would be a notable 15% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 50% to US$0.15. However, before this estimates update, the consensus had been expecting revenues of US$400m and US$0.035 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for Petra Diamonds

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that Petra Diamonds is forecast to grow faster in the future than it has in the past, with revenues expected to display 31% annualised growth until the end of 2024. If achieved, this would be a much better result than the 1.5% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 1.0% annually. So it looks like Petra Diamonds is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Petra Diamonds after today.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Petra Diamonds 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.

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