These Analysts Think Immersion Corporation's (NASDAQ:IMMR) Sales Are Under Threat

Today is shaping up negative for Immersion Corporation (NASDAQ:IMMR) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following this downgrade, Immersion's dual analysts are forecasting 2021 revenues to be US$36m, approximately in line with the last 12 months. Before the latest update, the analysts were foreseeing US$41m of revenue in 2021. It looks like forecasts have become a fair bit less optimistic on Immersion, given the substantial drop in revenue estimates.

View our latest analysis for Immersion

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would also point out that the forecast 3.7% annualised revenue decline to the end of 2021 is better than the historical trend, which saw revenues shrink 13% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 4.5% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Immersion to suffer worse than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Immersion this year. They're also anticipating slower revenue growth than the wider market. 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 Immersion after today.

There might be good reason for analyst bearishness towards Immersion, like dilutive stock issuance over the past year. Learn more, and discover the 2 other concerns 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.

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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.
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