Newsflash: Kin and Carta plc (LON:KCT) Analysts Have Been Trimming Their Revenue Forecasts

One thing we could say about the analysts on Kin and Carta plc (LON:KCT) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the current consensus from Kin and Carta's three analysts is for revenues of UK£207m in 2023 which - if met - would reflect a notable 8.9% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing UK£245m of revenue in 2023. The consensus view seems to have become more pessimistic on Kin and Carta, noting the measurable cut to revenue estimates in this update.

View our latest analysis for Kin and Carta

The consensus price target fell 25% to UK£2.85, with the analysts clearly less optimistic about Kin and Carta's valuation following this update. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Kin and Carta analyst has a price target of UK£3.75 per share, while the most pessimistic values it at UK£2.30. 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 Kin and Carta shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Kin and Carta's rate of growth is expected to accelerate meaningfully, with the forecast 8.9% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 3.0% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Kin and Carta is expected to grow slower than 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. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Kin and Carta going forwards.

Want to learn more? We have estimates for Kin and Carta from its three analysts out until 2025, 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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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.