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Need To Know: The Consensus Just Cut Its Team, Inc. (NYSE:TISI) Estimates For 2020

The analysts covering Team, Inc. (NYSE:TISI) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After the downgrade, the consensus from Team's four analysts is for revenues of US$935m in 2020, which would reflect a definite 17% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of US$1.1b in 2020. It looks like forecasts have become a fair bit less optimistic on Team, given the substantial drop in revenue estimates.

View our latest analysis for Team

NYSE:TISI Earnings and Revenue Growth June 25th 2020
NYSE:TISI Earnings and Revenue Growth June 25th 2020

Notably, the analysts have cut their price target 22% to US$11.25, suggesting concerns around Team's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Team analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$9.00. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 17% revenue decline a notable change from historical growth of 5.0% 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 3.9% next year. It's pretty clear that Team's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Team 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 Team's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Team going forwards.

Unanswered questions? At least one of Team's four analysts has provided estimates out to 2021, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.

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