Downgrade: What You Need To Know About The Latest Askoll EVA SpA (BIT:EVA) Forecasts

Today is shaping up negative for Askoll EVA SpA (BIT:EVA) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as the analyst signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Surprisingly the share price has been buoyant, rising 25% to €0.27 in the past 7 days. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.

After the downgrade, the sole analyst covering Askoll EVA is now predicting revenues of €14m in 2024. If met, this would reflect a major 39% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching €0.21 per share. Yet prior to the latest estimates, the analyst had been forecasting revenues of €17m and losses of €0.14 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Check out our latest analysis for Askoll EVA

The consensus price target fell 35% to €0.28, implicitly signalling that lower earnings per share are a leading indicator for Askoll EVA's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Askoll EVA's past performance and to peers in the same industry. For example, we noticed that Askoll EVA's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 39% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 5.1% 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 3.2% per year. So it looks like Askoll EVA 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 the analyst increased their loss per share estimates for this year. While the analyst did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The consensus price target fell measurably, with the analyst seemingly not reassured by recent business developments, leading to a lower estimate of Askoll EVA's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Askoll EVA going forwards.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2026, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.