Basic-Fit N.V. (AMS:BFIT) Analysts Just Trimmed Their Revenue Forecasts By 11%

Market forces rained on the parade of Basic-Fit N.V. (AMS:BFIT) shareholders today, when the analysts downgraded their 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. The stock price has risen 8.6% to €37.20 over the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the downgrade, the current consensus from Basic-Fit's seven analysts is for revenues of €366m in 2021 which - if met - would reflect a substantial 48% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing €412m of revenue in 2021. The consensus view seems to have become more pessimistic on Basic-Fit, noting the substantial drop in revenue estimates in this update.

View our latest analysis for Basic-Fit

We'd point out that there was no major changes to their price target of €40.94, suggesting the latest estimates were not enough to shift their view on the value of the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Basic-Fit at €47.00 per share, while the most bearish prices it at €36.50. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Basic-Fit's past performance and to peers in the same industry. The analysts are definitely expecting Basic-Fit's growth to accelerate, with the forecast 119% annualised growth to the end of 2021 ranking favourably alongside historical growth of 8.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Basic-Fit to grow faster than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Basic-Fit this year. They're also forecasting more rapid revenue growth than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Basic-Fit after today.

Thirsting for more data? At least one of Basic-Fit's seven analysts has provided estimates out to 2023, which can be seen 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 that insiders are buying.

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