One Calgro M3 Holdings Limited (JSE:CGR) Analyst Has Been Cutting Their Forecasts

Today is shaping up negative for Calgro M3 Holdings Limited (JSE:CGR) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, Calgro M3 Holdings' solo analyst currently expects revenues in 2025 to be R1.1b, approximately in line with the last 12 months. Statutory earnings per share are supposed to dip 5.5% to R2.06 in the same period. Previously, the analyst had been modelling revenues of R1.4b and earnings per share (EPS) of R2.05 in 2025. Indeed we can see that the consensus opinion has undergone some fundamental changes following the recent consensus updates, with a measurable cut to revenues and some minor tweaks to earnings numbers.

View our latest analysis for Calgro M3 Holdings

the analyst has also increased their price target 13% to R10.20, clearly signalling that lower revenue forecasts this year are not expected to have a material impact on Calgro M3 Holdings' valuation.

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. It's pretty clear that there is an expectation that Calgro M3 Holdings' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 0.02% growth on an annualised basis. This is compared to a historical growth rate of 10% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.9% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Calgro M3 Holdings.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with the analyst holding earnings per share steady, in line with previous estimates. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Given the stark change in sentiment, we'd understand if investors became more cautious on Calgro M3 Holdings after today.

As you can see, the analyst clearly isn't bullish, and there might be good reason for that. We've identified some potential issues with Calgro M3 Holdings' financials, such as recent substantial insider selling. Learn more, and discover the 3 other flags 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 backed by insiders.

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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.