Need To Know: Analysts Just Made A Substantial Cut To Their VOW ASA (OB:VOW) Estimates

Today is shaping up negative for VOW ASA (OB:VOW) 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 current consensus from VOW's four analysts is for revenues of kr521m in 2021 which - if met - would reflect a huge 26% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of kr602m in 2021. The consensus view seems to have become more pessimistic on VOW, noting the substantial drop in revenue estimates in this update.

Check out our latest analysis for VOW

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that VOW's rate of growth is expected to accelerate meaningfully, with the forecast 59% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 20% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 20% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that VOW is expected to grow much faster than its industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for VOW this year. The analysts also expect revenues to grow faster than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on VOW, and a few readers might choose to steer clear of the stock.

Still got questions? We have estimates for VOW from its four analysts out until 2023, and you can see them 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.

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.

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