Downgrade: What You Need To Know About The Latest Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) Forecasts
The analyst covering Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Investors however, have been notably more optimistic about Hall of Fame Resort & Entertainment recently, with the stock price up a notable 27% to US$3.31 in the past week. With such a sharp increase, it seems brokers may have seen something that is not yet being priced in by the wider market.
Following the downgrade, the current consensus from Hall of Fame Resort & Entertainment's sole analyst is for revenues of US$40m in 2024 which - if met - would reflect a major 95% increase on its sales over the past 12 months. Losses are presumed to reduce, shrinking 16% per share from last year to US$8.70. However, before this estimates update, the consensus had been expecting revenues of US$50m and US$8.44 per share in losses. 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.
See our latest analysis for Hall of Fame Resort & Entertainment
The consensus price target fell 56% to US$12.00, with the analyst clearly concerned about the company following the weaker revenue and earnings outlook.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analyst is definitely expecting Hall of Fame Resort & Entertainment's growth to accelerate, with the forecast 71% annualised growth to the end of 2024 ranking favourably alongside historical growth of 27% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Hall of Fame Resort & Entertainment is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analyst increased their loss per share estimates for next year. While the analyst did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The consensus price target fell measurably, with the analyst seemingly not reassured by recent business developments, leading to a lower estimate of Hall of Fame Resort & Entertainment's future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Hall of Fame Resort & Entertainment after today.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Hall of Fame Resort & Entertainment, including dilutive stock issuance over the past year. Learn more, and discover the 2 other flags we've identified, for 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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
