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Analysts Have Just Cut Their Abraxas Petroleum Corporation (NASDAQ:AXAS) Revenue Estimates By 29%

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The analysts covering Abraxas Petroleum Corporation (NASDAQ:AXAS) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory 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 current consensus, from the twin analysts covering Abraxas Petroleum, is for revenues of US$35m in 2020, which would reflect a concerning 73% reduction in Abraxas Petroleum's sales over the past 12 months. Before the latest update, the analysts were foreseeing US$49m of revenue in 2020. The consensus view seems to have become more pessimistic on Abraxas Petroleum, noting the sizeable cut to revenue estimates in this update.

See our latest analysis for Abraxas Petroleum

NasdaqCM:AXAS Earnings and Revenue Growth July 9th 2020
NasdaqCM:AXAS Earnings and Revenue Growth July 9th 2020

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 revenue decline of 73%, a significant reduction from annual growth of 14% 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 7.4% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Abraxas Petroleum is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. 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 Abraxas Petroleum after today.

Looking for more information? We have estimates for Abraxas Petroleum from its twin analysts out until 2024, and you can see them 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.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.