The analysts covering Saras S.p.A. (BIT:SRS) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
After the downgrade, the consensus from Saras' four analysts is for revenues of €13b in 2023, which would reflect a substantial 21% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of €15b in 2023. The consensus view seems to have become more pessimistic on Saras, noting the substantial drop in revenue estimates in this update.
Check out our latest analysis for Saras
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. We would highlight that sales are expected to reverse, with a forecast 21% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 8.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 7.4% annually for the foreseeable future. So it's pretty clear that Saras' revenues are expected to shrink faster than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. Analysts also expect revenues to shrink faster than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Saras going forwards.
Still got questions? At least one of Saras' four analysts has provided estimates out to 2025, which can be seen for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.
About BIT:SRS
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