Analyst Forecasts Just Became More Bearish On Smart Eye AB (publ) (STO:SEYE)

The analysts covering Smart Eye AB (publ) (STO:SEYE) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the most recent consensus for Smart Eye from its two analysts is for revenues of kr539m in 2025 which, if met, would be a sizeable 56% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of kr616m in 2025. The consensus view seems to have become more pessimistic on Smart Eye, noting the measurable cut to revenue estimates in this update.

See our latest analysis for Smart Eye

The consensus price target fell 9.4% to kr120, with the analysts clearly less optimistic about Smart Eye's valuation following this update.

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. We can infer from the latest estimates that forecasts expect a continuation of Smart Eye'shistorical trends, as the 42% annualised revenue growth to the end of 2025 is roughly in line with the 37% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 7.7% per year. So it's pretty clear that Smart Eye is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for next year. Analysts also expect revenues to grow faster than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Smart Eye'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 Smart Eye after today.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Smart Eye, including a short cash runway. For more information, you can click here to discover this and the 1 other warning sign we've identified.

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.