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The latest analyst coverage could presage a bad day for New Fortress Energy Inc. (NASDAQ:NFE), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
After this downgrade, New Fortress Energy's five analysts are now forecasting revenues of US$2.1b in 2022. This would be a major 23% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$2.4b of revenue in 2022. The consensus view seems to have become more pessimistic on New Fortress Energy, noting the measurable cut to revenue estimates in this update.
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 New Fortress Energy's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 32% growth on an annualised basis. This is compared to a historical growth rate of 83% over the past three years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 3.2% annually. So it's clear that despite the slowdown in growth, New Fortress Energy is still expected to grow meaningfully faster than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. The analysts also expect revenues to perform better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of New Fortress Energy going forwards.
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 New Fortress Energy's financials, such as concerns around earnings quality. For more information, you can click here to discover this and the 1 other warning sign we've identified.
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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.