One Cambridge Bancorp (NASDAQ:CATC) Analyst Just Slashed Their Estimates By A Noteworthy 21%

Today is shaping up negative for Cambridge Bancorp (NASDAQ:CATC) shareholders, with the covering analyst 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. The stock price has risen 8.6% to US$64.72 over the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following the latest downgrade, the one analyst covering Cambridge Bancorp provided consensus estimates of US$110m revenue in 2024, which would reflect a sizeable 28% decline on its sales over the past 12 months. Statutory earnings per share are presumed to grow 15% to US$4.19. Prior to this update, the analyst had been forecasting revenues of US$140m and earnings per share (EPS) of US$4.43 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a sizeable cut to revenue estimates and a minor downgrade to earnings per share numbers as well.

See our latest analysis for Cambridge Bancorp

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Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 36% by the end of 2024. This indicates a significant reduction from annual growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.9% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Cambridge Bancorp is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Cambridge Bancorp. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Cambridge Bancorp going forwards.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

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.

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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.