Things Look Grim For Arctic Fish Holding AS (OB:AFISH) After Today's Downgrade

The analysts covering Arctic Fish Holding AS (OB:AFISH) 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 analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

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After the downgrade, the dual analysts covering Arctic Fish Holding are now predicting revenues of €82m in 2025. If met, this would reflect a credible 3.4% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching €0.92 per share. However, before this estimates update, the consensus had been expecting revenues of €96m and €0.29 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.

See our latest analysis for Arctic Fish Holding

The consensus price target fell 24% to kr47.50, implicitly signalling that lower earnings per share are a leading indicator for Arctic Fish Holding's valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Arctic Fish Holding's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.6% growth on an annualised basis. This is compared to a historical growth rate of 9.0% over the past three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.9% annually. Factoring in the forecast slowdown in growth, it seems obvious that Arctic Fish Holding 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 Arctic Fish Holding. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Arctic Fish Holding's revenues are expected to grow slower 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.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Arctic Fish Holding, including a short cash runway. Learn more, and discover the 1 other warning sign we've identified, for free on our platform here.

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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.