What You Need To Know About The NanoXplore, Inc. (CVE:GRA) Analyst Downgrade Today
The analysts covering NanoXplore, Inc. (CVE:GRA) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. 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 current consensus from NanoXplore's four analysts is for revenues of CA$82m in 2021 which - if met - would reflect a solid 9.3% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing CA$100m of revenue in 2021. The consensus view seems to have become more pessimistic on NanoXplore, noting the measurable cut to revenue estimates in this update.
View our latest analysis for NanoXplore
Notably, the analysts have cut their price target 8.3% to CA$2.78, suggesting concerns around NanoXplore'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. Currently, the most bullish analyst values NanoXplore at CA$3.85 per share, while the most bearish prices it at CA$2.25. 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 NanoXplore shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the NanoXplore's past performance and to peers in the same industry. It's pretty clear that there is an expectation that NanoXplore's revenue growth will slow down substantially, with revenues next year expected to grow 9.3%, compared to a historical growth rate of 73% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.7% next year. Even after the forecast slowdown in growth, it seems obvious that NanoXplore is also expected to grow faster than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for NanoXplore next year. Analysts also expect revenues to grow faster than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given the stark change in sentiment, we'd understand if investors became more cautious on NanoXplore after today.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with NanoXplore's financials, such as dilutive stock issuance over the past year. For more information, you can click here to discover this and the 1 other warning sign 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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