New Fortress Energy Inc. (NASDAQ:NFE) Analysts Just Slashed This Year's Revenue Estimates By 13%

Today is shaping up negative for New Fortress Energy Inc. (NASDAQ:NFE) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the latest consensus from New Fortress Energy's five analysts is for revenues of US$1.5b in 2021, which would reflect a substantial 229% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$1.7b of revenue in 2021. The consensus view seems to have become more pessimistic on New Fortress Energy, noting the measurable cut to revenue estimates in this update.

View our latest analysis for New Fortress Energy

We'd point out that there was no major changes to their price target of US$62.90, suggesting the latest estimates were not enough to shift their view on the value of the business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic New Fortress Energy analyst has a price target of US$71.00 per share, while the most pessimistic values it at US$45.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await New Fortress Energy shareholders.

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. It's clear from the latest estimates that New Fortress Energy's rate of growth is expected to accelerate meaningfully, with the forecast 229% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 58% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect New Fortress Energy to grow faster than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for New Fortress Energy this year. They're also forecasting more rapid 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 New Fortress Energy after today.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with New Fortress Energy's financials, such as a short cash runway. Learn more, and discover the 2 other warning signs 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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