Today is shaping up negative for Inseego Corp. (NASDAQ:INSG) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Bidders are definitely seeing a different story, with the stock price of US$12.42 reflecting a 15% rise in the past week. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.

Following the downgrade, the consensus from three analysts covering Inseego is for revenues of US$187m in 2025, implying an uncomfortable 9.8% decline in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$229m in 2025. It looks like forecasts have become a fair bit less optimistic on Inseego, given the substantial drop in revenue estimates.

See our latest analysis for Inseego

There was no particular change to the consensus price target of US$16.00, with Inseego's latest outlook seemingly not enough to result in a change of valuation.

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. Over the past five years, revenues have declined around 5.2% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 7.9% decline in revenue until the end of 2025. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 8.2% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Inseego to suffer worse than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Inseego next 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 Inseego after today.

That said, the analysts might have good reason to be negative on Inseego, given dilutive stock issuance over the past year. Learn more, and discover the 3 other flags we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.