One thing we could say about the analysts on BenevolentAI S.A. (AMS:BAI) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. 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 BenevolentAI's four analysts is for revenues of UK£14m in 2023 which - if met - would reflect a huge 33% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 68% to UK£0.44. However, before this estimates update, the consensus had been expecting revenues of UK£19m and UK£0.44 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also making no real change to the loss per share numbers.
View our latest analysis for BenevolentAI
the analysts have cut their price target 12% to UK£3.18 per share, signalling that the declining revenue and ongoing losses are contributing to the lower valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic BenevolentAI analyst has a price target of UK£8.54 per share, while the most pessimistic values it at UK£1.53. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how think this business will perform. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
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. The analysts are definitely expecting BenevolentAI's growth to accelerate, with the forecast 33% annualised growth to the end of 2023 ranking favourably alongside historical growth of 21% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that BenevolentAI is expected to grow much faster than its industry.