One Micro Systemation AB (publ) (STO:MSAB B) Analyst Just Slashed Their 2021 Revenue Estimates

Market forces rained on the parade of Micro Systemation AB (publ) (STO:MSAB B) shareholders today, when the covering analyst downgraded their forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the latest consensus from Micro Systemation's lone analyst is for revenues of kr329m in 2021, which would reflect an okay 6.1% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analyst was forecasting revenues of kr369m in 2021. The consensus view seems to have become more pessimistic on Micro Systemation, noting the measurable cut to revenue estimates in this update.

Check out our latest analysis for Micro Systemation

Notably, the analyst has cut their price target 11% to kr41.00, suggesting concerns around Micro Systemation's valuation.

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. Next year brings more of the same, according to the analyst, with revenue forecast to grow 6.1%, in line with its 7.3% annual growth over the past five years. Compare this with the wider industry (in aggregate), which analyst estimates suggest will see revenues grow 20% next year. So it's pretty clear that Micro Systemation is expected to grow slower than similar companies in the same industry.

The Bottom Line

The most important thing to take away is that the analyst cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. The consensus price target fell measurably, with the analyst seemingly not reassured by recent business developments, leading to a lower estimate of Micro Systemation's future valuation. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Micro Systemation after today.

Still got questions? One Micro Systemation broker/analyst has provided estimates out to 2023, which can be seen for 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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