One thing we could say about the analysts on Komax Holding AG (VTX:KOMN) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.
Following the latest downgrade, the current consensus, from the seven analysts covering Komax Holding, is for revenues of CHF344m in 2020, which would reflect a chunky 18% reduction in Komax Holding's sales over the past 12 months. After this downgrade, the company is anticipated to report a loss of CHF2.03 in 2020, a sharp decline from a profit over the last year. Previously, the analysts had been modelling revenues of CHF392m and earnings per share (EPS) of CHF3.77 in 2020. So we can see that the consensus has become notably more bearish on Komax Holding's outlook with these numbers, making a substantial drop in this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.
The consensus price target fell 12% to CHF155, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Komax Holding analyst has a price target of CHF230 per share, while the most pessimistic values it at CHF103. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
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. We would highlight that sales are expected to reverse, with the forecast 18% revenue decline a notable change from historical growth of 6.5% 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 2.7% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Komax Holding is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts are expecting Komax Holding to become unprofitable this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Komax Holding's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Komax Holding.
Worse, Komax Holding is labouring under a substantial debt burden, which - if today's forecasts prove accurate - the forecast downgrade could potentially exacerbate. You can learn more about our debt analysis for free on our platform here.
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