Today is shaping up negative for Helios Technologies, Inc. (NYSE:HLIO) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
Following this downgrade, Helios Technologies' four analysts are forecasting 2024 revenues to be US$851m, approximately in line with the last 12 months. Per-share earnings are expected to ascend 17% to US$1.84. Previously, the analysts had been modelling revenues of US$952m and earnings per share (EPS) of US$2.81 in 2024. Indeed, we can see that the analysts are a lot more bearish about Helios Technologies' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
It'll come as no surprise then, to learn that the analysts have cut their price target 18% to US$56.80.
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. It's pretty clear that there is an expectation that Helios Technologies' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.2% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.8% per year. Factoring in the forecast slowdown in growth, it seems obvious that Helios Technologies is also expected to grow slower than other industry participants.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Helios Technologies. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Helios Technologies' revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Helios Technologies.
That said, the analysts might have good reason to be negative on Helios Technologies, given its declining profit margins. For more information, you can click here to discover this and the 1 other risk we've identified.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.