News Flash: 3 Analysts Think Inseego Corp. (NASDAQ:INSG) Earnings Are Under Threat

The analysts covering Inseego Corp. (NASDAQ:INSG) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the consensus from Inseego's three analysts is for revenues of US$193m in 2024, which would reflect a perceptible 6.5% decline in sales compared to the last year of performance. The loss per share is anticipated to greatly reduce in the near future, narrowing 36% to US$0.27. Yet before this consensus update, the analysts had been forecasting revenues of US$238m and losses of US$0.16 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for Inseego

The consensus price target fell 18% to US$1.12, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

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 5.2% by the end of 2024. This indicates a significant reduction from annual growth of 3.1% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.3% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Inseego is expected to lag the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at Inseego. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Inseego.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Inseego, including dilutive stock issuance over the past year. Learn more, and discover the 3 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 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.