Time To Worry? Analysts Just Downgraded Their Identiv, Inc. (NASDAQ:INVE) Outlook
The latest analyst coverage could presage a bad day for Identiv, Inc. (NASDAQ:INVE), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the downgrade, the most recent consensus for Identiv from its four analysts is for revenues of US$124m in 2024 which, if met, would be a reasonable 6.3% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 52% to US$0.10 per share. Previously, the analysts had been modelling revenues of US$143m and earnings per share (EPS) of US$0.14 in 2024. There looks to have been a major change in sentiment regarding Identiv's prospects, with a measurable cut to revenues and the analysts now forecasting a loss instead of a profit.
See our latest analysis for Identiv
The consensus price target fell 13% to US$10.13, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.
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. It's pretty clear that there is an expectation that Identiv's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.0% growth on an annualised basis. This is compared to a historical growth rate of 9.6% over the past five years. Compare this to the 221 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.1% per year. So it's pretty clear that, while Identiv's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to take away is that analysts are expecting Identiv to become unprofitable next year. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Identiv analysts - 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.
