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The analyst covering HSS Hire Group plc (LON:HSS) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as the analyst signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
After the downgrade, the consensus from HSS Hire Group's one analyst is for revenues of UK£276m in 2020, which would reflect an uncomfortable 16% decline in sales compared to the last year of performance. Before the latest update, the analyst was foreseeing UK£318m of revenue in 2020. The consensus view seems to have become more pessimistic on HSS Hire Group, noting the measurable cut to revenue estimates in this update.
See our latest analysis for HSS Hire Group
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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 16%, a significant reduction from annual growth of 1.4% 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 2.9% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - HSS Hire Group is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analyst cut their revenue estimates for this year. They also expect company revenue to perform worse 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 HSS Hire Group after today.
Looking for more information? We have forecasts for HSS Hire Group from one covering analyst, and you can see them free on our platform here.
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 that insiders are buying.
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This article by Simply Wall St is general in nature. 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. Thank you for reading.