Yahoo Finance One East 33 Limited (ASX:E33) Analyst Just Slashed Their Estimates By A Substantial 39%
One thing we could say about the covering analyst on East 33 Limited (ASX:E33) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.
After the downgrade, the single analyst covering East 33 is now predicting revenues of AU$30m in 2022. If met, this would reflect a sizeable 96% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 69% to AU$0.0045. Prior to this update, the analyst had been forecasting revenues of AU$49m and earnings per share (EPS) of AU$0.025 in 2022. There looks to have been a major change in sentiment regarding East 33's prospects, with a pretty serious reduction to revenues and the analyst now forecasting a loss instead of a profit.
See our latest analysis for East 33
The consensus price target fell 49% to AU$0.16, implicitly signalling that lower earnings per share are a leading indicator for East 33's valuation.
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. We would highlight that East 33's revenue growth is expected to slow, with the forecast 96% annualised growth rate until the end of 2022 being well below the historical 178% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.4% per year. Even after the forecast slowdown in growth, it seems obvious that East 33 is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analyst is expecting East 33 to become unprofitable this year. While the analyst did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for East 33 going out as far as 2024, 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. 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.
