Today is shaping up negative for Betmakers Technology Group Ltd (ASX:BET) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
Following the downgrade, the current consensus from Betmakers Technology Group's dual analysts is for revenues of AU$8.6m in 2020 which - if met - would reflect a meaningful 16% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of AU$9.9m in 2020. It looks like forecasts have become a fair bit less optimistic on Betmakers Technology Group, given the measurable cut to revenue estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Betmakers Technology Group's revenue growth will slow down substantially, with revenues next year expected to grow 16%, compared to a historical growth rate of 36% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.0% next year. So it's pretty clear that, while Betmakers Technology Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. The analysts also expect revenues to grow faster 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 Betmakers Technology Group after today.
That said, the analysts might have good reason to be negative on Betmakers Technology Group, given major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 3 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. 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. Thank you for reading.