One Analyst Thinks Shekel Brainweigh Ltd.'s (ASX:SBW) Revenues Are Under Threat

The latest analyst coverage could presage a bad day for Shekel Brainweigh Ltd. (ASX:SBW), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After the downgrade, the single analyst covering Shekel Brainweigh is now predicting revenues of US$20m in 2020. If met, this would reflect a modest 5.2% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analyst was forecasting revenues of US$22m in 2020. The forecasts seem less optimistic overall, with the slight decrease in revenue estimates in the latest consensus update.

See our latest analysis for Shekel Brainweigh

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 can infer from the latest estimates that forecasts expect a continuation of Shekel Brainweigh'shistorical trends, as next year's 5.2% revenue growth is roughly in line with 4.5% annual revenue growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 20% per year. So although Shekel Brainweigh is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Shekel Brainweigh after today.

As you can see, this analyst clearly isn't bullish, and there might be good reason for that. We've identified some potential issues with Shekel Brainweigh's financials, such as dilutive stock issuance over the past year. Learn more, and discover the 4 other flags we've identified, for free on our platform here.

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.

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.

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