One Analyst Just Shaved Their Irisity AB (publ) (STO:IRIS) Forecasts Dramatically

Today is shaping up negative for Irisity AB (publ) (STO:IRIS) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. 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 current consensus from Irisity's solitary analyst is for revenues of kr125m in 2023 which - if met - would reflect a solid 11% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 33% to kr2.39. Yet before this consensus update, the analyst had been forecasting revenues of kr162m and losses of kr1.47 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.

See our latest analysis for Irisity

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Irisity's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2023 being well below the historical 25% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.8% annually. Even after the forecast slowdown in growth, it seems obvious that Irisity is also expected to grow faster 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. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After a cut like that, investors could be forgiven for thinking the analyst is a lot more bearish on Irisity, and a few readers might choose to steer clear of the stock.

As you can see, this broker clearly isn't bullish, and there might be good reason for that. We've identified some potential issues with Irisity's financials, such as a short cash runway. Learn more, and discover the 3 other flags we've identified, for 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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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.