Need To Know: Analysts Just Made A Substantial Cut To Their Cambium Networks Corporation (NASDAQ:CMBM) Estimates

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 analysts have soured majorly on the business.

After the downgrade, the consensus from Cambium Networks' seven analysts is for revenues of US$268m in 2023, which would reflect a considerable 11% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to plummet 75% to US$0.19 in the same period. Before this latest update, the analysts had been forecasting revenues of US$333m and earnings per share (EPS) of US$0.98 in 2023. Indeed, we can see that the analysts are a lot more bearish about Cambium Networks' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Cambium Networks

It'll come as no surprise then, to learn that the analysts have cut their price target 37% to US$16.29.

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 highlight that sales are expected to reverse, with a forecast 21% annualised revenue decline to the end of 2023. That is a notable change from historical 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 5.2% 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 issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Cambium Networks. 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.

That said, the analysts might have good reason to be negative on Cambium Networks, given concerns around earnings quality. For more information, you can click here to discover this and the 2 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.