News Flash: One Fingerprint Cards AB (publ) (STO:FING B) Analyst Has Been Trimming Their Revenue Forecasts

Market forces rained on the parade of Fingerprint Cards AB (publ) (STO:FING 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. Investors however, have been notably more optimistic about Fingerprint Cards recently, with the stock price up a notable 21% to kr0.061 in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

Following the downgrade, the consensus from one analyst covering Fingerprint Cards is for revenues of kr386m in 2024, implying a stressful 40% decline in sales compared to the last 12 months. Prior to the latest estimates, the analyst was forecasting revenues of kr465m in 2024. It looks like forecasts have become a fair bit less optimistic on Fingerprint Cards, given the measurable cut to revenue estimates.

Check out our latest analysis for Fingerprint Cards

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. One more thing stood out to us about these estimates, and it's the idea that Fingerprint Cards' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 40% to the end of 2024. This tops off a historical decline of 17% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 8.5% annually. So it's pretty clear that, while it does have declining revenues, the analyst also expect Fingerprint Cards to suffer worse than the wider industry.

The Bottom Line

The clear low-light was that the analyst slashing their revenue forecasts for Fingerprint Cards this year. They're also anticipating slower revenue growth than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Fingerprint Cards 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 Fingerprint Cards' business, like major dilution from new stock issuance in the past year. Learn more, and discover the 1 other flag we've identified, 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.