One Zaptec ASA (OB:ZAP) Analyst Is Reducing Their Forecasts For This Year

The analyst covering Zaptec ASA (OB:ZAP) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

After this downgrade, Zaptec's sole analyst is now forecasting revenues of kr1.6b in 2024. This would be a decent 15% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to tumble 98% to kr0.004 in the same period. Previously, the analyst had been modelling revenues of kr1.8b and earnings per share (EPS) of kr1.10 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

View our latest analysis for Zaptec

The consensus price target fell 25% to kr15.00, with the weaker earnings outlook clearly leading analyst valuation estimates.

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. We would highlight that Zaptec's revenue growth is expected to slow, with the forecast 21% annualised growth rate until the end of 2024 being well below the historical 46% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.5% per year. Even after the forecast slowdown in growth, it seems obvious that Zaptec is also expected to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Zaptec. While the analyst 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 Zaptec, like concerns around earnings quality. Learn more, and discover the 1 other concern we've identified, 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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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.