Yahoo Finance Bearish: This Analyst Is Revising Their Victory Offices Limited (ASX:VOL) Revenue and EPS Prognostications
The latest analyst coverage could presage a bad day for Victory Offices Limited (ASX:VOL), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business. Shares are up 7.5% to AU$0.28 in the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.
Following the downgrade, the consensus from lone analyst covering Victory Offices is for revenues of AU$29m in 2021, implying a concerning 34% decline in sales compared to the last 12 months. Losses are expected to be contained, narrowing 10% from last year to AU$0.18. Yet before this consensus update, the analyst had been forecasting revenues of AU$32m and losses of AU$0.14 per share in 2021. Ergo, there's been a clear change in sentiment, with the analyst administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.
See our latest analysis for Victory Offices
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast revenue decline of 34%, a significant reduction from annual growth of 30% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 11% annually for the foreseeable future. It's pretty clear that Victory Offices' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analyst increased their loss per share estimates for this year. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Victory Offices' revenues are expected to grow slower than the wider market. After a cut like that, investors could be forgiven for thinking the analyst is a lot more bearish on Victory Offices, and a few readers might choose to steer clear of the stock.
There might be good reason for analyst bearishness towards Victory Offices, like major dilution from new stock issuance in the past year. Learn more, and discover the 2 other warning signs 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 that insiders are buying.
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