These Analysts Think accesso Technology Group plc’s (LON:ACSO) Sales Are Under Threat
Following the downgrade, the consensus from dual analysts covering accesso Technology Group is for revenues of US$40m in 2020, implying a sizeable 66% decline in sales compared to the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting US$0.10 in per-share earnings. Before this latest update, the analysts had been forecasting revenues of US$49m and earnings per share (EPS) of US$0.11 in 2020. It looks like analyst sentiment has fallen somewhat in this update, with a substantial drop in revenue estimates and a small dip in earnings per share numbers as well.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)--sm Mt(0.8em)--sm" type="text" content=" View our latest analysis for accesso Technology Group " data-reactid="30"> View our latest analysis for accesso Technology Group
AIM:ACSO Past and Future Earnings June 10th 2020
The average price target climbed 8.5% to UK£7.95 despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic accesso Technology Group analyst has a price target of UK£12.00 per share, while the most pessimistic values it at UK£3.89. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
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. We would highlight that sales are expected to reverse, with the forecast 66% revenue decline a notable change from historical growth of 9.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.0% annually for the foreseeable future. It's pretty clear that accesso Technology Group's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of accesso Technology Group going forwards.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)--sm Mt(0.8em)--sm" type="text" content="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 2022, which can be seen for free on our platform here." data-reactid="47">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 2022, which can be seen for free on our platform here.
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." data-reactid="53">Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email 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. 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.
Gloss