One Analyst Thinks Kaspien Holdings Inc.'s (NASDAQ:KSPN) Revenues Are Under Threat

Today is shaping up negative for Kaspien Holdings Inc. (NASDAQ:KSPN) shareholders, with the covering analyst delivering a substantial negative revision to next year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, Kaspien Holdings' one analyst currently expects revenues in 2023 to be US$153m, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 38% to US$0.44. Before this latest update, the analyst had been forecasting revenues of US$174m and earnings per share (EPS) of US$0.32 in 2023. So we can see that the consensus has become notably more bearish on Kaspien Holdings' outlook with these numbers, making a substantial drop in next year's revenue estimates. Furthermore, they expect the business to be loss-making next year, compared to their previous forecasts of a profit.

View our latest analysis for Kaspien Holdings

The consensus price target fell 33% to US$40.00, with the analyst clearly concerned about the company following the weaker revenue and earnings outlook.

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. We would also point out that the forecast 0.04% annualised revenue decline to the end of 2023 is better than the historical trend, which saw revenues shrink 23% annually over the past five years By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 15% per year. So while a broad number of companies are forecast to grow, unfortunately Kaspien Holdings is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that the analyst is expecting Kaspien Holdings to become unprofitable next year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of Kaspien Holdings.

That said, the analyst might have good reason to be negative on Kaspien Holdings, given major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 3 other warning signs we've identified.

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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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.