Analysts Just Made A Major Revision To Their Clarus Corporation (NASDAQ:CLAR) Revenue Forecasts

One thing we could say about the analysts on Clarus Corporation (NASDAQ:CLAR) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the current consensus, from the seven analysts covering Clarus, is for revenues of US$374m in 2024, which would reflect a perceptible 2.9% reduction in Clarus' sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 98% to US$0.04. Previously, the analysts had been modelling revenues of US$420m and earnings per share (EPS) of US$0.25 in 2024. So we can see that the consensus has become notably more bearish on Clarus' outlook with these numbers, making a substantial drop in next year's revenue estimates. Furthermore, they expect the business to be loss-making next year, compared to their previous forecasts of a profit.

View our latest analysis for Clarus

The consensus price target fell 26% to US$7.97, implicitly signalling that lower earnings per share are a leading indicator for Clarus' valuation.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 2.3% by the end of 2024. This indicates a significant reduction from annual growth of 19% 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 3.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Clarus is expected to lag the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Clarus dropped from profits to a loss next year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower 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. Given the stark change in sentiment, we'd understand if investors became more cautious on Clarus after today.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Clarus going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.