Need To Know: This Analyst Just Made A Substantial Cut To Their CDON AB (STO:CDON) Estimates

Today is shaping up negative for CDON AB (STO:CDON) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon. Shares are up 6.8% to kr50.20 in the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

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Following the latest downgrade, the solo analyst covering CDON provided consensus estimates of kr409m revenue in 2025, which would reflect a perceptible 2.6% decline on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 47% to kr5.25 per share. However, before this estimates update, the consensus had been expecting revenues of kr458m and kr4.29 per share in losses. 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.

See our latest analysis for CDON

The consensus price target fell 9.8% to kr129, with the analyst clearly concerned about the company following the weaker revenue and earnings outlook.

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. We would also point out that the forecast 3.4% annualised revenue decline to the end of 2025 is better than the historical trend, which saw revenues shrink 4.5% annually over the past three years By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 10% per year. So it's pretty clear that, while it does have declining revenues, the analyst also expect CDON to suffer worse than the wider 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 CDON. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that CDON's revenues are expected to grow slower 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 CDON.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2027, which can be seen 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 with high insider ownership.

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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.