One Analyst Thinks Studio City International Holdings Limited's (NYSE:MSC) Revenues Are Under Threat

The latest analyst coverage could presage a bad day for Studio City International Holdings Limited (NYSE:MSC), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. 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$5.45 reflecting a 15% rise in the past week. With such a sharp increase, it seems brokers may have seen something that is not yet being priced in by the wider market.

After the downgrade, the lone analyst covering Studio City International Holdings is now predicting revenues of US$198m in 2022. If met, this would reflect a substantial 86% improvement in sales compared to the last 12 months. Before the latest update, the analyst was foreseeing US$298m of revenue in 2022. The consensus view seems to have become more pessimistic on Studio City International Holdings, noting the sizeable cut to revenue estimates in this update.

See our latest analysis for Studio City International Holdings

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Studio City International Holdings' past performance and to peers in the same industry. One thing stands out from these estimates, which is that Studio City International Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to display 86% annualised growth until the end of 2022. If achieved, this would be a much better result than the 31% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 17% per year. Not only are Studio City International Holdings' revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst cut their revenue estimates for this year. The analyst also expects revenues to grow faster 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 Studio City International Holdings after today.

Still got questions? One Studio City International Holdings broker/analyst has provided estimates out to 2024, which can be seen for 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.