Revenue Downgrade: Here's What Analysts Forecast For 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 this 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 dual analysts is for revenues of kr390m in 2024 which, if met, would be a decent 13% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of kr434m in 2024. It looks like forecasts have become a fair bit less optimistic on Smart Eye, given the substantial drop in revenue estimates.

See our latest analysis for Smart Eye

Notably, the analysts have cut their price target 5.3% to kr135, suggesting concerns around Smart Eye'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. We would highlight that Smart Eye's revenue growth is expected to slow, with the forecast 28% annualised growth rate until the end of 2024 being well below the historical 37% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.4% annually. So it's pretty clear that, while Smart Eye's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. Analysts also expect revenues to grow faster than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. 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 2 other risks 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.