One thing we could say about the covering analyst on Bonesupport Holding AB (publ) (STO:BONEX) - 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 this downgrade, Bonesupport Holding's solo analyst is now forecasting revenues of kr257m in 2021. This would be a sizeable 42% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 33% to kr1.15. Yet before this consensus update, the analyst had been forecasting revenues of kr302m and losses of kr0.67 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a serious cut to their revenue forecasts while also expecting losses per share to increase.
The consensus price target fell 11% to kr58.00, 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. The analyst is definitely expecting Bonesupport Holding's growth to accelerate, with the forecast 42% annualised growth to the end of 2021 ranking favourably alongside historical growth of 13% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 24% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Bonesupport Holding is expected to grow much faster than its industry.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Bonesupport Holding. While the analyst did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of Bonesupport Holding.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Bonesupport Holding going out as far as 2023, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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