The analysts covering accesso Technology Group plc (LON:ACSO) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook – perhaps a sign that investors should temper their expectations as well.
After the downgrade, the two analysts covering accesso Technology Group are now predicting revenues of US$73m in 2021. If met, this would reflect a huge 30% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$85m in 2021. The consensus view seems to have become more pessimistic on accesso Technology Group, noting the measurable cut to revenue estimates in this update.
Check out our latest analysis for accesso Technology Group
We’d point out that there was no major changes to their price target of UK£7.26, suggesting the latest estimates were not enough to shift their view on the value of the business. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on accesso Technology Group, with the most bullish analyst valuing it at UK£8.00 and the most bearish at UK£6.78 per share. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the accesso Technology Group’s past performance and to peers in the same industry. For example, we noticed that accesso Technology Group’s rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 30% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 2.5% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 13% annually. So it looks like accesso Technology Group is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. Analysts also expect revenues to grow faster than the wider market. Overall, given the drastic downgrade to this year’s forecasts, we’d be feeling a little more wary of accesso Technology Group going forwards.
That said, the analysts might have good reason to be negative on accesso Technology Group, given dilutive stock issuance over the past year. For more information, you can click here to discover this and the 2 other risks we’ve identified.
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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