The Kingfish Company N.V.'s (OB:KING) Analyst Just Slashed This Year's Estimates

Market forces rained on the parade of The Kingfish Company N.V. (OB:KING) shareholders today, when the covering analyst downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

Following the downgrade, the most recent consensus for Kingfish from its lone analyst is for revenues of €22m in 2023 which, if met, would be a decent 18% increase on its sales over the past 12 months. Losses are supposed to balloon 27% to €0.084 per share. Yet prior to the latest estimates, the analyst had been forecasting revenues of €30m and losses of €0.07 per share in 2023. Ergo, there's been a clear change in sentiment, with the analyst administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for Kingfish

The consensus price target fell 15% to €0.93, implicitly signalling that lower earnings per share are a leading indicator for Kingfish's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kingfish's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Kingfish's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 18% growth on an annualised basis. This is compared to a historical growth rate of 52% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.1% per year. Even after the forecast slowdown in growth, it seems obvious that Kingfish is also expected to grow faster than 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 Kingfish. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Kingfish.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Kingfish's business, like a short cash runway. For more information, you can click here to discover this and the 1 other flag we've identified.

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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