Time To Worry? Analysts Just Downgraded Their Kornit Digital Ltd. (NASDAQ:KRNT) Outlook
Market forces rained on the parade of Kornit Digital Ltd. (NASDAQ:KRNT) shareholders today, when the analysts downgraded their forecasts for next year. 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, Kornit Digital's six analysts are now forecasting revenues of US$245m in 2024. This would be a solid 8.3% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 79% to US$0.33. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$290m and losses of US$0.27 per share in 2024. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.
View our latest analysis for Kornit Digital
The consensus price target fell 12% to US$26.17, implicitly signalling that lower earnings per share are a leading indicator for Kornit Digital's valuation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Kornit Digital's revenue growth is expected to slow, with the forecast 6.6% annualised growth rate until the end of 2024 being well below the historical 14% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.7% annually. So it's pretty clear that, while Kornit Digital's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better 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. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Kornit Digital after today.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Kornit Digital going out to 2025, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.
