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Market forces rained on the parade of accesso Technology Group plc (LON:ACSO) shareholders today, when the analysts downgraded their 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.
Following the downgrade, the current consensus from accesso Technology Group's two analysts is for revenues of US$73m in 2021 which - if met - would reflect a substantial 30% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$85m of revenue in 2021. It looks like forecasts have become a fair bit less optimistic on accesso Technology Group, given the substantial drop in revenue estimates.
See our latest analysis for accesso Technology Group
There was no particular change to the consensus price target of UK£7.26, with accesso Technology Group's latest outlook seemingly not enough to result in a change of valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on accesso Technology Group, with the most bullish analyst valuing it at UK£8.00 and the most bearish at UK£6.78 per share. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that accesso Technology Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 30% annualised growth until the end of 2021. If achieved, this would be a much better result than the 2.5% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 13% per year. Not only are accesso Technology Group's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for accesso Technology Group this year. They're also forecasting more rapid revenue growth 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 accesso Technology Group after today.