The Unifi, Inc. (NYSE:UFI) Analysts Have Been Trimming Their Sales Forecasts

One thing we could say about the analysts on Unifi, Inc. (NYSE:UFI) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the latest downgrade, the dual analysts covering Unifi provided consensus estimates of US$750m revenue in 2023, which would reflect a noticeable 6.2% decline on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$869m of revenue in 2023. It looks like forecasts have become a fair bit less optimistic on Unifi, given the measurable cut to revenue estimates.

Check out our latest analysis for Unifi

The consensus price target fell 39% to US$14.00, with the analysts clearly less optimistic about Unifi'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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 8.1% by the end of 2023. This indicates a significant reduction from annual growth of 2.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.6% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Unifi is expected to lag 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. 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 Unifi after today.

But wait - there's more! At least one of Unifi's dual analysts has provided estimates out to 2024, which can be seen 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.