Bearish: Analysts Just Cut Their Pyrum Innovations AG (OB:PYRUM) Revenue and EPS estimates

One thing we could say about the analysts on Pyrum Innovations AG (OB:PYRUM) - 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) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. Shares are up 6.8% to kr442 in the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

Following the downgrade, the consensus from dual analysts covering Pyrum Innovations is for revenues of €1.6m in 2023, implying a sizeable 89% decline in sales compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to €2.67. Yet before this consensus update, the analysts had been forecasting revenues of €3.5m and losses of €1.30 per share in 2023. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out our latest analysis for Pyrum Innovations

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 89% by the end of 2023. This indicates a significant reduction from annual growth of 51% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 45% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Pyrum Innovations is expected to lag the wider industry.

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 Pyrum Innovations. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Pyrum Innovations, and their negativity could be grounds for caution.

That said, the analysts might have good reason to be negative on Pyrum Innovations, given a short cash runway. Learn more, and discover the 1 other warning sign 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.