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Time To Worry? Analysts Just Downgraded Their Intevac, Inc. (NASDAQ:IVAC) Outlook

Simply Wall St
·3 mins read

Market forces rained on the parade of Intevac, Inc. (NASDAQ:IVAC) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the latest downgrade, the current consensus, from the two analysts covering Intevac, is for revenues of US$88m in 2020, which would reflect an uncomfortable 15% reduction in Intevac's sales over the past 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of US$0.14 per share in 2020. Before this latest update, the analysts had been forecasting revenues of US$119m and earnings per share (EPS) of US$0.30 in 2020. There looks to have been a major change in sentiment regarding Intevac's prospects, with a pretty serious reduction to revenues and the analysts now forecasting a loss instead of a profit.

Check out our latest analysis for Intevac

NasdaqGS:IVAC Past and Future Earnings May 4th 2020
NasdaqGS:IVAC Past and Future Earnings May 4th 2020

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 15%, a significant reduction from annual growth of 8.8% 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 6.6% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Intevac is expected to lag the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Intevac dropped from profits to a loss this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Intevac, and we wouldn't blame shareholders for feeling a little more cautious themselves.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2021, which can be seen for 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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.