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Market forces rained on the parade of Ebusco Holding N.V. (AMS:EBUS) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
After this downgrade, Ebusco Holding's two analysts are now forecasting revenues of €239m in 2024. This would be a major 142% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 34% to €1.34 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of €268m and losses of €0.82 per share in 2024. 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 expecting losses per share to increase.
View our latest analysis for Ebusco Holding
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Ebusco Holding's rate of growth is expected to accelerate meaningfully, with the forecast 142% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 25% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Ebusco Holding to grow faster than the wider industry.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Ebusco Holding. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Ebusco Holding, and a few readers might choose to steer clear of the stock.
That said, the analysts might have good reason to be negative on Ebusco Holding, given dilutive stock issuance over the past year. Learn more, and discover the 3 other warning signs we've identified, for 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 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.