What Does The Future Hold For Polestar Automotive Holding UK PLC (NASDAQ:PSNY)? These Analysts Have Been Cutting Their Estimates

Market forces rained on the parade of Polestar Automotive Holding UK PLC (NASDAQ:PSNY) shareholders today, when the analysts 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.

After the downgrade, the four analysts covering Polestar Automotive Holding UK are now predicting revenues of US$3.2b in 2023. If met, this would reflect a huge 30% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$3.7b in 2023. It looks like forecasts have become a fair bit less optimistic on Polestar Automotive Holding UK, given the substantial drop in revenue estimates.

View our latest analysis for Polestar Automotive Holding UK

The consensus price target fell 12% to US$5.94, with the analysts clearly less optimistic about Polestar Automotive Holding UK's valuation following this update. 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. Currently, the most bullish analyst values Polestar Automotive Holding UK at US$12.00 per share, while the most bearish prices it at US$2.70. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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 would highlight that Polestar Automotive Holding UK's revenue growth is expected to slow, with the forecast 42% annualised growth rate until the end of 2023 being well below the historical 59% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% annually. Even after the forecast slowdown in growth, it seems obvious that Polestar Automotive Holding UK is also expected to grow faster than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Polestar Automotive Holding UK 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. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Polestar Automotive Holding UK going forwards.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Polestar Automotive Holding UK, including a short cash runway. Learn more, and discover the 1 other concern 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 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.