One Esautomotion S.p.A. (BIT:ESAU) Analyst Just Made A Major Cut To Next Year's Estimates

The latest analyst coverage could presage a bad day for Esautomotion S.p.A. (BIT:ESAU), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

Following the latest downgrade, Esautomotion's lone analyst currently expects revenues in 2024 to be €30m, approximately in line with the last 12 months. Statutory earnings per share are presumed to soar 65% to €0.23. Prior to this update, the analyst had been forecasting revenues of €36m and earnings per share (EPS) of €0.36 in 2024. Indeed, we can see that the analyst is a lot more bearish about Esautomotion's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Esautomotion

The consensus price target fell 20% to €5.76, with the weaker earnings outlook clearly leading analyst valuation estimates.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 1.1% by the end of 2024. This indicates a significant reduction from annual growth of 16% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.6% annually for the foreseeable future. It's pretty clear that Esautomotion's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Esautomotion. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Esautomotion's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of Esautomotion.

As you can see, the analyst clearly isn't bullish, and there might be good reason for that. We've identified some potential issues with Esautomotion's financials, such as concerns around earnings quality. Learn more, and discover the 3 other warning signs we've identified, 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 with high insider ownership.

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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.