Yahoo Finance Sabio Holdings Inc. (CVE:SBIO) Analysts Just Slashed This Year's Revenue Estimates By 11%
Market forces rained on the parade of Sabio Holdings Inc. (CVE:SBIO) shareholders today, when the analysts downgraded their forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
Following the latest downgrade, the four analysts covering Sabio Holdings provided consensus estimates of US$42m revenue in 2023, which would reflect a measurable 5.7% decline on its sales over the past 12 months. Losses are supposed to balloon 69% to US$0.09 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$46m and losses of US$0.02 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
See our latest analysis for Sabio Holdings
The consensus price target fell 27% to CA$2.25, implicitly signalling that lower earnings per share are a leading indicator for Sabio Holdings' valuation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 11% by the end of 2023. This indicates a significant reduction from annual growth of 46% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.4% annually for the foreseeable future. It's pretty clear that Sabio Holdings' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower 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 Sabio Holdings' future valuation. 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 Sabio Holdings after today.
That said, the analysts might have good reason to be negative on Sabio Holdings, given dilutive stock issuance over the past year. For more information, you can click here to discover this and the 4 other concerns 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.
