Analysts Are More Bearish On AutoStore Holdings Ltd. (OB:AUTO) Than They Used To Be

Today is shaping up negative for AutoStore Holdings Ltd. (OB:AUTO) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. At kr5.10, shares are up 9.7% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

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Following the latest downgrade, the current consensus, from the eleven analysts covering AutoStore Holdings, is for revenues of US$421m in 2025, which would reflect a disturbing 23% reduction in AutoStore Holdings' sales over the past 12 months. Statutory earnings per share are supposed to nosedive 57% to US$0.014 in the same period. Prior to this update, the analysts had been forecasting revenues of US$625m and earnings per share (EPS) of US$0.038 in 2025. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a large cut to earnings per share numbers as well.

See our latest analysis for AutoStore Holdings

Analysts made no major changes to their price target of US$0.81, suggesting the downgrades are not expected to have a long-term impact on AutoStore Holdings' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic AutoStore Holdings analyst has a price target of US$1.35 per share, while the most pessimistic values it at US$0.48. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 30% by the end of 2025. This indicates a significant reduction from annual growth of 8.2% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 14% per year. It's pretty clear that AutoStore Holdings' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on AutoStore Holdings after the downgrade.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple AutoStore Holdings analysts - going out to 2027, and you can see them free 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.