Analysts Just Slashed Their Otovo ASA (OB:OTOVO) EPS Numbers

The latest analyst coverage could presage a bad day for Otovo ASA (OB:OTOVO), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After this downgrade, Otovo's three analysts are now forecasting revenues of kr1.5b in 2024. This would be a major 43% improvement in sales compared to the last 12 months. Losses are presumed to reduce, shrinking 15% per share from last year to kr2.04. However, before this estimates update, the consensus had been expecting revenues of kr1.8b and kr1.63 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for Otovo

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Otovo's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 33% growth on an annualised basis. This is compared to a historical growth rate of 48% 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) 6.3% per year. Even after the forecast slowdown in growth, it seems obvious that Otovo is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for next year. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the serious cut to next year's outlook, it's clear that analysts have turned more bearish on Otovo, and we wouldn't blame shareholders for feeling a little more cautious themselves.

There might be good reason for analyst bearishness towards Otovo, like dilutive stock issuance over the past year. Learn more, and discover the 3 other flags we've identified, for 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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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.