iPower Inc. (NASDAQ:IPW) Analysts Are More Bearish Than They Used To Be

The latest analyst coverage could presage a bad day for iPower Inc. (NASDAQ:IPW), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After the downgrade, the consensus from iPower's dual analysts is for revenues of US$87m in 2023, which would reflect a small 3.8% decline in sales compared to the last year of performance. Per-share losses are expected to see a sharp uptick, reaching US$0.29. However, before this estimates update, the consensus had been expecting revenues of US$103m and US$0.095 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

See our latest analysis for iPower

The consensus price target fell 50% to US$1.50, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the iPower's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 7.5% by the end of 2023. This indicates a significant reduction from annual growth of 31% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 11% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - iPower is expected to lag the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at iPower. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that iPower's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of iPower.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with iPower, including dilutive stock issuance over the past year. For more information, you can click here to discover this and the 2 other warning signs we've identified.

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.