One Forecaster Is Now More Bearish On Peraso Inc. (NASDAQ:PRSO) Than They Used To Be

Market forces rained on the parade of Peraso Inc. (NASDAQ:PRSO) shareholders today, when the covering analyst downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the most recent consensus for Peraso from its lone analyst is for revenues of US$17m in 2023 which, if met, would be a solid 16% increase on its sales over the past 12 months. Losses are presumed to reduce, shrinking 19% per share from last year to US$0.75. However, before this estimates update, the consensus had been expecting revenues of US$20m and US$0.70 per share in losses. Ergo, there's been a clear change in sentiment, with the analyst administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for Peraso

The consensus price target fell 33% to US$1.00, implicitly signalling that lower earnings per share are a leading indicator for Peraso's valuation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Peraso's rate of growth is expected to accelerate meaningfully, with the forecast 34% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 26% over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Peraso to grow faster than 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 Peraso. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The consensus price target fell measurably, with the analyst seemingly not reassured by recent business developments, leading to a lower estimate of Peraso's future valuation. 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 Peraso after today.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Peraso, including a short cash runway. Learn more, and discover the 2 other risks we've identified, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.