The Triboo S.p.A. (BIT:TB) Analysts Have Been Trimming Their Sales Forecasts

The analysts covering Triboo S.p.A. (BIT:TB) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the current consensus from Triboo's dual analysts is for revenues of €102m in 2023 which - if met - would reflect a solid 12% increase on its sales over the past 12 months. Per-share earnings are expected to jump 425% to €0.12. Previously, the analysts had been modelling revenues of €114m and earnings per share (EPS) of €0.16 in 2023. Indeed, we can see that the analysts are a lot more bearish about Triboo's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Triboo

The consensus price target fell 8.2% to €2.25, with the weaker earnings outlook clearly leading analyst valuation estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Triboo at €2.40 per share, while the most bearish prices it at €2.10. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Triboo is an easy business to forecast or the underlying assumptions are obvious.

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. The analysts are definitely expecting Triboo's growth to accelerate, with the forecast 12% annualised growth to the end of 2023 ranking favourably alongside historical growth of 8.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Triboo 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 Triboo. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Triboo's future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Triboo after today.

Worse, Triboo is labouring under a substantial debt burden, which - if today's forecasts prove accurate - the forecast downgrade could potentially exacerbate. To see more of our financial analysis, you can click through to our free platform to learn more about its balance sheet and specific concerns we've identified.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.