Downgrade: The Latest Revenue And EPS Forecasts For Sotkamo Silver AB (NGM:SOSI)

One thing we could say about the covering analyst on Sotkamo Silver AB (NGM:SOSI) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

After the downgrade, the consensus from Sotkamo Silver's one analyst is for revenues of kr402m in 2022, which would reflect a discernible 3.0% decline in sales compared to the last year of performance. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analyst forecasting losses of kr0.06 per share in 2022. Before this latest update, the analyst had been forecasting revenues of kr451m and earnings per share (EPS) of kr0.15 in 2022. So we can see that the consensus has become notably more bearish on Sotkamo Silver's outlook with these numbers, making a substantial drop in this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

See our latest analysis for Sotkamo Silver

The consensus price target fell 42% to kr1.10, with the analyst clearly concerned about the company following the weaker revenue and earnings outlook.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 6.0% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 62% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 6.2% annually for the foreseeable future.

The Bottom Line

The most important thing to take away is that the analyst is expecting Sotkamo Silver to become unprofitable this year. Unfortunately the analyst also downgraded their revenue estimates, although the forecast result is still roughly in line with that of the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Sotkamo Silver going out as far as 2024, and you can see them free on our platform here.

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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.