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One thing we could say about the analysts on Fiore Gold Ltd. (CVE:F) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the downgrade, the current consensus from Fiore Gold's three analysts is for revenues of US$88m in 2021 which - if met - would reflect a meaningful 13% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$87m in 2021. Overall it looks like Fiore Gold is performing in line with analyst expectations, given the analysts have updated their numbers and there's been no real change to this year's forecast following these updates.
There was no particular change to the consensus price target of US$1.95, with Fiore Gold's latest outlook seemingly not enough to result in a change of valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Fiore Gold analyst has a price target of US$2.87 per share, while the most pessimistic values it at US$2.25. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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. It's pretty clear that there is an expectation that Fiore Gold's revenue growth will slow down substantially, with revenues next year expected to grow 13%, compared to a historical growth rate of 39% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.6% next year. So it's pretty clear that, while Fiore Gold's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The clear take away from these updates is that analysts made no change to their revenue estimates for this year, with the business apparently performing in line with their models. They're also forecasting more rapid revenue growth than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Fiore Gold after today.
Looking for more information? At least one of Fiore Gold's three analysts has provided estimates out to 2025, which can be seen 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.
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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