Market forces rained on the parade of Profire Energy, Inc. (NASDAQ:PFIE) shareholders today, when the analysts downgraded their forecasts for next year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
After the downgrade, the consensus from Profire Energy's twin analysts is for revenues of US$18m in 2021, which would reflect a concerning 24% decline in sales compared to the last year of performance. Before the latest update, the analysts were foreseeing US$21m of revenue in 2021. It looks like forecasts have become a fair bit less optimistic on Profire Energy, given the measurable cut to revenue estimates.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Profire Energy's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 24%, a significant reduction from annual growth of 6.2% 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 5.4% next year. It's pretty clear that Profire Energy's 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 next year. They're also anticipating slower revenue growth than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Profire Energy after today.
Unanswered questions? We have estimates for Profire Energy from its twin analysts out until 2022, 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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