Need To Know: Analysts Just Made A Substantial Cut To Their The Lion Electric Company (TSE:LEV) Estimates
The analysts covering The Lion Electric Company (TSE:LEV) 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) forecasts went under the knife, suggesting the analysts have soured majorly on the business.
After the downgrade, the eight analysts covering Lion Electric are now predicting revenues of US$362m in 2024. If met, this would reflect a huge 43% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 20% to US$0.36. However, before this estimates update, the consensus had been expecting revenues of US$532m and US$0.28 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.
Check out our latest analysis for Lion Electric
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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 43% growth on an annualised basis. That is in line with its 53% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 8.4% per year. So it's pretty clear that Lion Electric is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Lion Electric, and we wouldn't blame shareholders for feeling a little more cautious themselves.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Lion Electric, including a short cash runway. For more information, you can click here to discover this and the 1 other risk we've identified.
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.
