Yahoo Finance Shorn Like A Sheep: One Analyst Just Shaved Their RigNet, Inc. (NASDAQ:RNET) Forecasts Dramatically
The analyst covering RigNet, Inc. (NASDAQ:RNET) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the latest downgrade, the current consensus, from the single analyst covering RigNet, is for revenues of US$206m in 2020, which would reflect a chunky 15% reduction in RigNet's sales over the past 12 months. Losses are supposed to balloon 105% to US$1.98 per share. However, before this estimates update, the consensus had been expecting revenues of US$234m and US$1.34 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a serious cut to their revenue forecasts while also expecting losses per share to increase.
View our latest analysis for RigNet
Of course, another way to look at these forecasts is to place them into context against the industry itself. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue shrink 3.0% per year. While this is interesting, RigNet's, revenues are still expected to shrink next year, and at a faster rate than the wider industry.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at RigNet. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that RigNet revenue is expected to perform worse than the wider market. After a cut like that, investors could be forgiven for thinking the analyst is a lot more bearish on RigNet, and a few readers might choose to steer clear of the stock.
As you can see, the analyst clearly isn't bullish, and there might be good reason for that. We've identified some potential issues with RigNet's financials, such as dilutive stock issuance over the past year. Learn more, and discover the 4 other concerns we've identified, for 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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
