Downgrade: What You Need To Know About The Latest Entravision Communications Corporation (NYSE:EVC) Forecasts
One thing we could say about the covering analyst on Entravision Communications Corporation (NYSE:EVC) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. 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 consensus from solo analyst covering Entravision Communications is for revenues of US$223m in 2020, implying a chunky 18% decline in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 65% to US$0.08. Before this latest update, the analyst had been forecasting revenues of US$286m and earnings per share (EPS) of US$0.41 in 2020. There looks to have been a major change in sentiment regarding Entravision Communications' prospects, with a sizeable cut to revenues and the analyst now forecasting a loss instead of a profit.
See our latest analysis for Entravision Communications
The consensus price target fell 22% to US$3.50, implicitly signalling that lower earnings per share are a leading indicator for Entravision Communications' valuation.
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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 18%, a significant reduction from annual growth of 7.5% 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 3.3% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Entravision Communications is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analyst is expecting Entravision Communications to become unprofitable this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Entravision Communications going out as far as 2021, 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.
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.
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