What You Need To Know About The Sequans Communications S.A. (NYSE:SQNS) Analyst Downgrade Today

The latest analyst coverage could presage a bad day for Sequans Communications S.A. (NYSE:SQNS), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

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Following the downgrade, the most recent consensus for Sequans Communications from its three analysts is for revenues of US$42m in 2026 which, if met, would be a sizeable 33% increase on its sales over the past 12 months. Per-share losses are expected to see a sharp uptick, reaching US$2.13. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$48m and losses of US$3.87 per share in 2026. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

See our latest analysis for Sequans Communications

The consensus price target fell 48% to US$21.33, with the dip in revenue estimates clearly souring analyst sentiment, despite the forecast reduction in losses.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sequans Communications' past performance and to peers in the same industry. For example, we noticed that Sequans Communications' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 26% growth to the end of 2026 on an annualised basis. That is well above its historical decline of 11% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 19% per year. So it looks like Sequans Communications is expected to grow faster than its competitors, at least for a while.

The Bottom Line

Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Sequans Communications going forwards.

That said, the analysts might have good reason to be negative on Sequans Communications, given major dilution from new stock issuance in the past year. Learn more, and discover the 2 other risks 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 with high insider ownership.

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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.