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The analysts covering Drilling Tools International Corporation (NASDAQ:DTI) 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.
Following the downgrade, the latest consensus from Drilling Tools International's three analysts is for revenues of US$161m in 2024, which would reflect a solid 9.0% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$180m in 2024. The consensus view seems to have become more pessimistic on Drilling Tools International, noting the substantial drop in revenue estimates in this update.
See our latest analysis for Drilling Tools International
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Drilling Tools International's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 19% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 2.7% a year over the past year. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 7.1% per year. Not only are Drilling Tools International'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 Drilling Tools International this year. They're also forecasting more rapid revenue growth than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Drilling Tools International going forwards.
There might be good reason for analyst bearishness towards Drilling Tools International, like its declining profit margins. For more information, you can click here to discover this and the 3 other warning signs 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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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.