HydrogenPro ASA (OB:HYPRO) Analysts Just Cut Their EPS Forecasts Substantially

One thing we could say about the analysts on HydrogenPro ASA (OB:HYPRO) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the current consensus from HydrogenPro's dual analysts is for revenues of kr743m in 2024 which - if met - would reflect a major 59% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching kr1.51 per share. However, before this estimates update, the consensus had been expecting revenues of kr837m and kr1.29 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Check out our latest analysis for HydrogenPro

The consensus price target fell 25% to US$3.25, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values HydrogenPro at US$4.53 per share, while the most bearish prices it at US$1.96. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that HydrogenPro's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 45% growth on an annualised basis. This is compared to a historical growth rate of 61% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% per year. Even after the forecast slowdown in growth, it seems obvious that HydrogenPro is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at HydrogenPro. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

There might be good reason for analyst bearishness towards HydrogenPro, like dilutive stock issuance over the past year. For more information, you can click here to discover this and the 4 other risks we've identified.

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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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.