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The Consensus EPS Estimates For Iconix Brand Group, Inc. (NASDAQ:ICON) Just Fell A Lot

Simply Wall St
·3 mins read

The analyst covering Iconix Brand Group, Inc. (NASDAQ:ICON) 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) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the current consensus, from the one analyst covering Iconix Brand Group, is for revenues of US$114m in 2020, which would reflect a substantial 24% reduction in Iconix Brand Group's sales over the past 12 months. Losses are predicted to fall substantially, shrinking 91% to US$0.98. Yet prior to the latest estimates, the analyst had been forecasting revenues of US$133m and losses of US$0.80 per share in 2020. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Check out our latest analysis for Iconix Brand Group

NasdaqGS:ICON Past and Future Earnings April 6th 2020
NasdaqGS:ICON Past and Future Earnings April 6th 2020

Of course, another way to look at these forecasts is to place them into context against the industry itself. Over the past five years, revenues have declined around 20% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for a 24% decline in revenue next year. Compare this against analyst estimates for companies in the wider industry, which suggest that revenues (in aggregate) are expected to grow 6.7% next year. So it's pretty clear that, while it does have declining revenues, the analyst also expect Iconix Brand Group to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst increased their loss per share estimates for this year. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Iconix Brand Group's revenues are expected to grow slower than the wider market. After a cut like that, investors could be forgiven for thinking the analyst is a lot more bearish on Iconix Brand Group, and a few readers might choose to steer clear of the stock.

That said, the analyst might have good reason to be negative on Iconix Brand Group, given major dilution from new stock issuance in the past year. Learn more, and discover the 2 other warning signs we've identified, for 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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.