Analyst Forecasts Just Became More Bearish On Clarus Corporation (NASDAQ:CLAR)

Market forces rained on the parade of Clarus Corporation (NASDAQ:CLAR) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. Bidders are definitely seeing a different story, with the stock price of US$6.66 reflecting a 26% rise in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

Following the latest downgrade, the six analysts covering Clarus provided consensus estimates of US$276m revenue in 2024, which would reflect a noticeable 3.6% decline on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$371m in 2024. The consensus view seems to have become more pessimistic on Clarus, noting the pretty serious reduction to revenue estimates in this update.

Check out our latest analysis for Clarus

There was no particular change to the consensus price target of US$7.25, with Clarus' latest outlook seemingly not enough to result in a change of 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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 3.6% by the end of 2024. This indicates a significant reduction from annual growth of 15% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.4% per year. It's pretty clear that Clarus' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also anticipating slower revenue growth than the wider market. 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 Clarus after today.

Unsatisfied? We have estimates for Clarus from its six analysts out until 2026, and you can see them 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.