Enzymatica AB (STO:ENZY) Analysts Just Cut Their EPS Forecasts

The analysts covering Enzymatica AB (STO:ENZY) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the twin analysts covering Enzymatica provided consensus estimates of kr107m revenue in 2021, which would reflect a measurable 3.6% decline on its sales over the past 12 months. Losses are supposed to balloon 99% to kr0.18 per share. Prior to this update, the analysts had been forecasting revenues of kr196m and earnings per share (EPS) of kr0.094 in 2021. So we can see that the consensus has become notably more bearish on Enzymatica's outlook with these numbers, making a sizeable cut to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

View our latest analysis for Enzymatica

The consensus price target fell 37% to US$1.94, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 3.6% by the end of 2021. This indicates a significant reduction from annual growth of 22% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 23% annually for the foreseeable future. It's pretty clear that Enzymatica's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts are expecting Enzymatica to become unprofitable this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than 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.

There might be good reason for analyst bearishness towards Enzymatica, like a short cash runway. For more information, you can click here to discover this and the 1 other warning sign we've identified.

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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