Need To Know: Analysts Just Made A Substantial Cut To Their Clarus Corporation (NASDAQ:CLAR) Estimates
Market forces rained on the parade of Clarus Corporation (NASDAQ:CLAR) shareholders today, when the analysts downgraded their forecasts for next year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
After the downgrade, the consensus from Clarus' seven analysts is for revenues of US$374m in 2024, which would reflect a noticeable 2.9% decline in sales compared to the last year of performance. The loss per share is anticipated to greatly reduce in the near future, narrowing 98% to US$0.04. Before this latest update, the analysts had been forecasting revenues of US$420m and earnings per share (EPS) of US$0.25 in 2024. There looks to have been a major change in sentiment regarding Clarus' prospects, with a substantial drop in revenues and the analysts now forecasting a loss instead of a profit.
See our latest analysis for Clarus
The consensus price target fell 28% to US$8.75, implicitly signalling that lower earnings per share are a leading indicator for Clarus' valuation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Clarus' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 2.3% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 19% 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 3.4% per year. It's pretty clear that Clarus' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts are expecting Clarus to become unprofitable next year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Clarus.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Clarus going out to 2025, 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
