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One thing we could say about the analysts on Prospa Group Limited (ASX:PGL) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
After this downgrade, Prospa Group's twin analysts are now forecasting revenues of AU$131m in 2020. This would be a sizeable 33% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of AU$149m in 2020. The consensus view seems to have become more pessimistic on Prospa Group, noting the measurable cut to revenue estimates in this update.
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. It's clear from the latest estimates that Prospa Group's rate of growth is expected to accelerate meaningfully, with the forecast 33% revenue growth noticeably faster than its historical growth of 9.8% over the past year. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 38% per year. Prospa Group is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. The analysts also expect revenues to grow approximately in line with the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Prospa Group, and we wouldn't blame shareholders for feeling a little more cautious themselves.
But wait - there's more! At least one of Prospa Group's twin analysts has provided estimates out to 2022, 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.
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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. Thank you for reading.