One 4C Group AB (publ) (STO:4C) Analyst Just Slashed Their Estimates By A Consequential 13%

Market forces rained on the parade of 4C Group AB (publ) (STO:4C) shareholders today, when the covering analyst downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

After the downgrade, the solitary analyst covering 4C Group is now predicting revenues of kr332m in 2023. If met, this would reflect an okay 5.3% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 75% to kr0.15. Previously, the analyst had been modelling revenues of kr381m and earnings per share (EPS) of kr0.93 in 2023. So we can see that the consensus has become notably more bearish on 4C Group's outlook with these numbers, making a measurable 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.

See our latest analysis for 4C Group

The consensus price target fell 47% to kr24.00, with the analyst clearly concerned about the company following the weaker revenue and earnings outlook.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that 4C Group's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 5.3% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 16% per year. Factoring in the forecast slowdown in growth, it seems obvious that 4C Group is also expected to grow slower than other industry participants.

The Bottom Line

The biggest low-light for us was that the forecasts for 4C Group dropped from profits to a loss 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.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for 4C Group going out as far as 2025, and you can see them 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.