Bearish: This Analyst Is Revising Their Ferroamp AB (publ) (STO:FERRO) Revenue and EPS Prognostications

The latest analyst coverage could presage a bad day for Ferroamp AB (publ) (STO:FERRO), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the consensus from one analyst covering Ferroamp is for revenues of kr268m in 2024, implying a painful 23% decline in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 51% to kr1.58. Yet prior to the latest estimates, the analyst had been forecasting revenues of kr353m and losses of kr0.93 per share in 2024. 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 Ferroamp

The consensus price target fell 17% to kr10.00, with the analyst clearly concerned about the company following the weaker revenue and earnings outlook.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ferroamp's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 23% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 45% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 18% annually for the foreseeable future. It's pretty clear that Ferroamp's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst increased their loss per share estimates for this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower 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 Ferroamp.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Ferroamp, including major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 3 other warning signs 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 with high insider ownership.

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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.

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