Analysts Just Slashed Their Cambium Networks Corporation (NASDAQ:CMBM) Earnings Forecasts

One thing we could say about the analysts on Cambium Networks Corporation (NASDAQ:CMBM) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the latest downgrade, the current consensus, from the seven analysts covering Cambium Networks, is for revenues of US$232m in 2023, which would reflect a substantial 23% reduction in Cambium Networks' sales over the past 12 months. After this downgrade, the company is anticipated to report a loss of US$0.29 in 2023, a sharp decline from a profit over the last year. Before this latest update, the analysts had been forecasting revenues of US$268m and earnings per share (EPS) of US$0.19 in 2023. There looks to have been a major change in sentiment regarding Cambium Networks' prospects, with a substantial drop in revenues and the analysts now forecasting a loss instead of a profit.

See our latest analysis for Cambium Networks

The consensus price target fell 35% to US$10.60, implicitly signalling that lower earnings per share are a leading indicator for Cambium Networks' valuation.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 41% by the end of 2023. This indicates a significant reduction from annual growth of 3.4% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.3% annually for the foreseeable future. It's pretty clear that Cambium Networks' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Cambium Networks dropped from profits to a loss this 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 analysts, we'd understand if readers now felt a bit wary of Cambium Networks.

There might be good reason for analyst bearishness towards Cambium Networks, like concerns around earnings quality. Learn more, and discover the 1 other warning sign 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 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.