Stock Analysis

This Broker Just Slashed Their Acuvi AB (STO:ACUVI) Earnings Forecasts

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One thing we could say about the covering analyst on Acuvi AB (STO:ACUVI) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

After the downgrade, the one analyst covering Acuvi is now predicting revenues of kr221m in 2023. If met, this would reflect a notable 19% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 21% to kr3.00. However, before this estimates update, the consensus had been expecting revenues of kr247m and kr2.50 per share in losses. 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 Acuvi

OM:ACUVI Earnings and Revenue Growth March 16th 2023

The consensus price target fell 36% to kr36.00, with the analyst clearly concerned about the company following the weaker revenue and earnings outlook.

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. We would highlight that Acuvi's revenue growth is expected to slow, with the forecast 19% annualised growth rate until the end of 2023 being well below the historical 44% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 22% annually. Factoring in the forecast slowdown in growth, it looks like Acuvi is forecast to grow at about the same rate as 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 Acuvi. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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 Acuvi.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Acuvi going out as far as 2025, 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.

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