Analysts Have Just Cut Their ION Geophysical Corporation (NYSE:IO) Revenue Estimates By 12%

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

Following the latest downgrade, ION Geophysical's four analysts currently expect revenues in 2021 to be US$76m, approximately in line with the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$87m in 2021. The consensus view seems to have become more pessimistic on ION Geophysical, noting the substantial drop in revenue estimates in this update.

See our latest analysis for ION Geophysical

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2021 compared to the historical decline of 9.6% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 10% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect ION Geophysical to suffer worse than 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. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of ION Geophysical going forwards.

There might be good reason for analyst bearishness towards ION Geophysical, like major dilution from new stock issuance in the past year. Learn more, and discover the 4 other risks we've identified, for free on our platform here.

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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.
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