Analysts Just Shaved Their Cint Group AB (publ) (STO:CINT) Forecasts Dramatically

The analysts covering Cint Group AB (publ) (STO:CINT) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the latest consensus from Cint Group's four analysts is for revenues of €320m in 2023, which would reflect a substantial 23% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 86% to €0.015. Before this latest update, the analysts had been forecasting revenues of €369m and earnings per share (EPS) of €0.046 in 2023. So we can see that the consensus has become notably more bearish on Cint Group's outlook with these numbers, making a substantial drop in next year's revenue estimates. Furthermore, they expect the business to be loss-making next year, compared to their previous forecasts of a profit.

View our latest analysis for Cint Group

The consensus price target fell 50% to €3.70, implicitly signalling that lower earnings per share are a leading indicator for Cint Group's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Cint Group, with the most bullish analyst valuing it at €49.16 and the most bearish at €37.09 per share. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

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. We would highlight that Cint Group's revenue growth is expected to slow, with the forecast 18% annualised growth rate until the end of 2023 being well below the historical 45% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 18% annually. Factoring in the forecast slowdown in growth, it looks like Cint Group is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Cint Group dropped from profits to a loss next year. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Cint Group.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Cint Group going out to 2025, 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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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.