Time To Worry? Analysts Just Downgraded Their W.A.G payment solutions plc (LON:WPS) Outlook

Today is shaping up negative for W.A.G payment solutions plc (LON:WPS) shareholders, with the analysts 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.

Following the latest downgrade, the seven analysts covering W.A.G payment solutions provided consensus estimates of €2.0b revenue in 2024, which would reflect a small 2.4% decline on its sales over the past 12 months. Before the latest update, the analysts were foreseeing €2.3b of revenue in 2024. The consensus view seems to have become more pessimistic on W.A.G payment solutions, noting the substantial drop in revenue estimates in this update.

View our latest analysis for W.A.G payment solutions

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There was no particular change to the consensus price target of €1.48, with W.A.G payment solutions' latest outlook seemingly not enough to result in a change of valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values W.A.G payment solutions at €1.69 per share, while the most bearish prices it at €1.06. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 2.4% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 17% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 9.5% annually for the foreseeable future. The forecasts do look comparatively optimistic for W.A.G payment solutions, since they're expecting it to shrink slower than the industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also forecasting for revenues to perform better than companies in the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of W.A.G payment solutions going forwards.

Hungry for more information? At least one of W.A.G payment solutions' seven analysts has provided estimates out to 2026, 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.