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There's been a notable change in appetite for Carbon Revolution Limited (ASX:CBR) shares in the week since its half-year report, with the stock down 11% to AU$2.24. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from Carbon Revolution's twin analysts is for revenues of AU$45.8m in 2021, which would reflect a substantial 27% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 72% to AU$0.06. Yet prior to the latest earnings, the analysts had been forecasting revenues of AU$47.0m and losses of AU$0.04 per share in 2021. So it's pretty clear the analysts have mixed opinions on Carbon Revolution after this update; revenues were downgraded and per-share losses expected to increase.
The consensus price target fell 5.0% to AU$3.11, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. Next year brings more of the same, according to the analysts, with revenue forecast to grow 27%, in line with its 23% annual growth over the past year. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 12% next year. So although Carbon Revolution is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Carbon Revolution. They also downgraded their revenue estimates, although industry data suggests that Carbon Revolution's revenues are expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Carbon Revolution going out as far as 2025, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Carbon Revolution , and understanding them should be part of your investment process.
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.
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