What Does The Future Hold For Modern Times Group Mtg AB (STO:MTG B)? These Analysts Have Been Cutting Their Estimates

Market forces rained on the parade of Modern Times Group Mtg AB (STO:MTG B) 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. Shares are up 5.4% to kr131 in the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the downgrade, the most recent consensus for Modern Times Group Mtg from its three analysts is for revenues of kr6.4b in 2022 which, if met, would be a major 35% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing kr7.1b of revenue in 2022. It looks like forecasts have become a fair bit less optimistic on Modern Times Group Mtg, given the substantial drop in revenue estimates.

View our latest analysis for Modern Times Group Mtg

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. One thing stands out from these estimates, which is that Modern Times Group Mtg is forecast to grow faster in the future than it has in the past, with revenues expected to display 35% annualised growth until the end of 2022. If achieved, this would be a much better result than the 36% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 17% annually. Not only are Modern Times Group Mtg's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. Analysts also expect revenues to grow faster than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Modern Times Group Mtg going forwards.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Modern Times Group Mtg's business, like major dilution from new stock issuance in the past year. Learn more, and discover the 1 other risk 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.