Downgrade: Here's How Analysts See TransAct Technologies Incorporated (NASDAQ:TACT) Performing In The Near Term

Market forces rained on the parade of TransAct Technologies Incorporated (NASDAQ:TACT) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the current consensus from TransAct Technologies' two analysts is for revenues of US$36m in 2021 which - if met - would reflect a major 25% increase on its sales over the past 12 months. Per-share losses are expected to see a sharp uptick, reaching US$0.97. However, before this estimates update, the consensus had been expecting revenues of US$41m and US$0.71 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

See our latest analysis for TransAct Technologies

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that TransAct Technologies' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 35% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 11% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.6% annually. Not only are TransAct Technologies' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at TransAct Technologies. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on TransAct Technologies, and their negativity could be grounds for caution.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for TransAct Technologies going out as far as 2023, and you can see them 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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