Newsflash: Sivers Semiconductors AB (publ) (STO:SIVE) Analysts Have Been Trimming Their Revenue Forecasts

The analysts covering Sivers Semiconductors AB (publ) (STO:SIVE) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory 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. The stock price has risen 8.1% to kr9.23 over 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.

Following the downgrade, the consensus from three analysts covering Sivers Semiconductors is for revenues of kr137m in 2022, implying a considerable 17% decline in sales compared to the last 12 months. Losses are presumed to reduce, shrinking 15% from last year to kr0.63. Yet before this consensus update, the analysts had been forecasting revenues of kr176m and losses of kr0.60 per share in 2022. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out our latest analysis for Sivers Semiconductors

The consensus price target fell 9.7% to kr14.00, implicitly signalling that lower earnings per share are a leading indicator for Sivers Semiconductors' valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Sivers Semiconductors, with the most bullish analyst valuing it at kr16.00 and the most bearish at kr12.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sivers Semiconductors' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 32% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 14% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 13% per year. It's pretty clear that Sivers Semiconductors' revenues are expected to perform substantially 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 Sivers Semiconductors. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Sivers Semiconductors' revenues are expected to grow slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given the stark change in sentiment, we'd understand if investors became more cautious on Sivers Semiconductors after today.

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 Sivers Semiconductors' business, like dilutive stock issuance over the past year. For more information, you can click here to discover this and the 1 other warning sign we've identified.

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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.