This Giglio Group S.p.A. (BIT:GG) Analyst Just Made A Noteworthy 21% Cut To Their Forecasts

Today is shaping up negative for Giglio Group S.p.A. (BIT:GG) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

After the downgrade, the lone analyst covering Giglio Group is now predicting revenues of €49m in 2021. If met, this would reflect a sizeable 29% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 93% to €0.01. Before this latest update, the analyst had been forecasting revenues of €63m and earnings per share (EPS) of €0.10 in 2021. There looks to have been a major change in sentiment regarding Giglio Group's prospects, with a pretty serious reduction to revenues and the analyst now forecasting a loss instead of a profit.

Check out our latest analysis for Giglio Group

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Giglio Group's past performance and to peers in the same industry. It's clear from the latest estimates that Giglio Group's rate of growth is expected to accelerate meaningfully, with the forecast 29% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 4.8% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 20% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Giglio Group is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analyst is expecting Giglio Group to become unprofitable this year. While the analyst did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After a cut like that, investors could be forgiven for thinking the analyst is a lot more bearish on Giglio Group, and a few readers might choose to steer clear of the stock.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Giglio Group going out as far as 2022, and you can see them 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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