Downgrade: Here's How Analysts See Digital Bros S.p.A. (BIT:DIB) Performing In The Near Term

The analysts covering Digital Bros S.p.A. (BIT:DIB) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After this downgrade, Digital Bros' dual analysts are now forecasting revenues of €143m in 2024. This would be a sizeable 21% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to soar 120% to €1.49. Before this latest update, the analysts had been forecasting revenues of €165m and earnings per share (EPS) of €2.08 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

View our latest analysis for Digital Bros

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Digital Bros' rate of growth is expected to accelerate meaningfully, with the forecast 21% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 13% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.4% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Digital Bros is expected to grow much faster than its industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Digital Bros. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Digital Bros, and a few readers might choose to steer clear of the stock.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Digital Bros, including concerns around earnings quality. For more information, you can click here to discover this and the 1 other warning sign we've identified.

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.