The LoopUp Group plc (LON:LOOP) Analysts Have Been Trimming Their Sales Forecasts

By
Simply Wall St
Published
July 24, 2021
AIM:LOOP
Source: Shutterstock

Today is shaping up negative for LoopUp Group plc (LON:LOOP) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the consensus from LoopUp Group's two analysts is for revenues of UK£25m in 2021, which would reflect a disturbing 51% decline in sales compared to the last year of performance. Before the latest update, the analysts were foreseeing UK£30m of revenue in 2021. It looks like forecasts have become a fair bit less optimistic on LoopUp Group, given the measurable cut to revenue estimates.

Check out our latest analysis for LoopUp Group

earnings-and-revenue-growth
AIM:LOOP Earnings and Revenue Growth July 24th 2021

Notably, the analysts have cut their price target 60% to UK£0.63, suggesting concerns around LoopUp Group's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 51% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 34% 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 10% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - LoopUp Group is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also anticipating slower revenue growth than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of LoopUp Group's future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on LoopUp Group after today.

Want more information? At least one of LoopUp Group's two analysts has provided estimates out to 2023, which can be seen for 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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This article by Simply Wall St is general in nature. 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.
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