The analysts covering Pilbara Minerals Limited (ASX:PLS) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. At AU$2.88, shares are up 5.9% in the past 7 days. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

After the downgrade, the consensus from Pilbara Minerals' 17 analysts is for revenues of AU$863m in 2025, which would reflect a sizeable 31% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of AU$1.0b in 2025. It looks like forecasts have become a fair bit less optimistic on Pilbara Minerals, given the substantial drop in revenue estimates.

View our latest analysis for Pilbara Minerals

We'd point out that there was no major changes to their price target of AU$3.12, suggesting the latest estimates were not enough to shift their view on the value of the business.

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 31% by the end of 2025. This indicates a significant reduction from annual growth of 57% 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 2.3% per year. It's pretty clear that Pilbara Minerals' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Pilbara Minerals this year. They're also anticipating slower revenue growth than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Pilbara Minerals after today.

There might be good reason for analyst bearishness towards Pilbara Minerals, like concerns around earnings quality. For more information, you can click here to discover this and the 1 other risk we've identified.

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 with high insider ownership.

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