The analyst covering Freelance.com SA (EPA:ALFRE) 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) forecasts went under the knife, suggesting the analyst has soured majorly on the business.
Following the downgrade, the current consensus from Freelance.com's sole analyst is for revenues of €249m in 2020 which - if met - would reflect a credible 4.8% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to plummet 23% to €0.12 in the same period. Before this latest update, the analyst had been forecasting revenues of €278m and earnings per share (EPS) of €0.18 in 2020. Indeed, we can see that the analyst is a lot more bearish about Freelance.com's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
It'll come as no surprise then, to learn that the analyst has cut their price target 9.1% to €3.00.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Freelance.com's revenue growth is expected to slow, with forecast 4.8% increase next year well below the historical 40% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.1% next year. Even after the forecast slowdown in growth, it seems obvious that Freelance.com is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of Freelance.com.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Freelance.com going out as far as 2022, and you can see them 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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