Yahoo Finance What You Need To Know About The Pacific Edge Limited (NZSE:PEB) Analyst Downgrade Today
Today is shaping up negative for Pacific Edge Limited (NZSE:PEB) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the downgrade, the most recent consensus for Pacific Edge from its two analysts is for revenues of NZ$15m in 2021 which, if met, would be a major 195% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 62% to NZ$0.012. Yet prior to the latest estimates, the analysts had been forecasting revenues of NZ$18m and losses of NZ$0.012 per share in 2021. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to this year's revenue estimates, while at the same time holding losses per share steady.
View our latest analysis for Pacific Edge
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. For example, we noticed that Pacific Edge's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 195%, well above its historical decline of 1.3% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 12% per year. Not only are Pacific Edge's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better 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 Pacific Edge after today.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Pacific Edge's financials, such as dilutive stock issuance over the past year. Learn more, and discover the 5 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 that insiders are buying.
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