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Need To Know: The Consensus Just Cut Its Holley Inc. (NYSE:HLLY) Estimates For 2022

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Today is shaping up negative for Holley Inc. (NYSE:HLLY) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the consensus from eight analysts covering Holley is for revenues of US$709m in 2022, implying a discernible 3.2% decline in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$790m in 2022. It looks like forecasts have become a fair bit less optimistic on Holley, given the substantial drop in revenue estimates.

See our latest analysis for Holley

earnings-and-revenue-growth
earnings-and-revenue-growth

The consensus price target fell 31% to US$10.57, with the analysts clearly less optimistic about Holley's valuation following this update. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Holley, with the most bullish analyst valuing it at US$13.00 and the most bearish at US$9.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Holley shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Holley's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 4.2% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 30% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 15% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Holley is expected to lag the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Holley this year. They also expect company revenue to perform worse than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Holley's future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Holley after today.

Thirsting for more data? At least one of Holley's eight analysts has provided estimates out to 2024, 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.

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.

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