Market forces rained on the parade of Harvest Minerals Limited (LON:HMI) shareholders today, when the covering analyst downgraded their forecasts for this year. Revenue estimates were cut sharply as the analyst signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
Following the downgrade, the most recent consensus for Harvest Minerals from its single analyst is for revenues of AU$9.4m in 2020 which, if met, would be a substantial 477% increase on its sales over the past 12 months. Prior to the latest estimates, the analyst was forecasting revenues of AU$11m in 2020. It looks like forecasts have become a fair bit less optimistic on Harvest Minerals, given the measurable cut to revenue estimates.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Harvest Minerals' rate of growth is expected to accelerate meaningfully, with the forecast 5x revenue growth noticeably faster than its historical growth of 135% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 2.6% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Harvest Minerals to grow faster 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. The analyst also expects revenues to grow faster than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Harvest Minerals after today.
That said, the analyst might have good reason to be negative on Harvest Minerals, given dilutive stock issuance over the past year. Learn more, and discover the 3 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 email@example.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.