These Analysts Think Mentice AB (publ)'s (STO:MNTC) Sales Are Under Threat

Market forces rained on the parade of Mentice AB (publ) (STO:MNTC) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After this downgrade, Mentice's three analysts are now forecasting revenues of kr288m in 2024. This would be a notable 13% improvement in sales compared to the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of kr1.20 per share this year. Previously, the analysts had been modelling revenues of kr335m and earnings per share (EPS) of kr1.61 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Mentice

It'll come as no surprise then, to learn that the analysts have cut their price target 19% to kr45.00.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Mentice's rate of growth is expected to accelerate meaningfully, with the forecast 17% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 14% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Mentice is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given the stark change in sentiment, we'd understand if investors became more cautious on Mentice after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Mentice analysts - going out to 2026, 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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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.