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Today is shaping up negative for Beyond Frames Entertainment AB (publ) (FRA:8WP) shareholders, with the analysts 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 downgrade, the consensus from twin analysts covering Beyond Frames Entertainment is for revenues of kr203m in 2024, implying a small 2.6% decline in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing kr237m of revenue in 2024. The consensus view seems to have become more pessimistic on Beyond Frames Entertainment, noting the measurable cut to revenue estimates in this update.
View our latest analysis for Beyond Frames Entertainment
We'd point out that there was no major changes to their price target of kr29.00, suggesting the latest estimates were not enough to shift their view on the value of the business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Beyond Frames Entertainment at kr30.00 per share, while the most bearish prices it at kr28.00. This is a very narrow spread of estimates, implying either that Beyond Frames Entertainment is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 5.1% by the end of 2024. This indicates a significant reduction from annual growth of 60% over the last five 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 Beyond Frames Entertainment's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse 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 Beyond Frames Entertainment after today.