These Analysts Think Agilyx ASA's (OB:AGLX) Sales Are Under Threat

Today is shaping up negative for Agilyx ASA (OB:AGLX) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the most recent consensus for Agilyx from its four analysts is for revenues of US$21m in 2023 which, if met, would be a major 24% increase on its sales over the past 12 months. Losses are expected to be contained, narrowing 11% per share from last year to US$0.24 per share. However, before this estimates update, the consensus had been expecting revenues of US$25m and US$0.22 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 Agilyx

The consensus price target fell 9.0% to US$6.02, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Agilyx analyst has a price target of US$9.78 per share, while the most pessimistic values it at US$3.84. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

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 Agilyx's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 24% growth on an annualised basis. This is compared to a historical growth rate of 41% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 39% per year. Factoring in the forecast slowdown in growth, it seems obvious that Agilyx is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Agilyx. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. 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 Agilyx after today.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Agilyx's financials, such as dilutive stock issuance over the past year. Learn more, and discover the 1 other flag 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.