Yahoo Finance Need To Know: The Consensus Just Cut Its Quantum Corporation (NASDAQ:QMCO) Estimates For 2024
The latest analyst coverage could presage a bad day for Quantum Corporation (NASDAQ:QMCO), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
After the downgrade, the consensus from Quantum's four analysts is for revenues of US$354m in 2024, which would reflect a chunky 13% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of US$412m in 2024. It looks like forecasts have become a fair bit less optimistic on Quantum, given the substantial drop in revenue estimates.
Check out our latest analysis for Quantum
Notably, the analysts have cut their price target 53% to US$1.10, suggesting concerns around Quantum's valuation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. Over the past five years, revenues have declined around 1.1% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 17% decline in revenue until the end of 2024. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 6.2% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Quantum to suffer worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Quantum's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Quantum going forwards.
That said, the analysts might have good reason to be negative on Quantum, given recent substantial insider selling. For more information, you can click here to discover this and the 4 other warning signs we've identified.
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.
