One OneSoft Solutions Inc. (CVE:OSS) Analyst Just Slashed Their 2020 Revenue Estimates
One thing we could say about the covering analyst on OneSoft Solutions Inc. (CVE:OSS) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. Investors however, have been notably more optimistic about OneSoft Solutions recently, with the stock price up an impressive 15% to CA$0.32 in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.
After this downgrade, OneSoft Solutions' single analyst is now forecasting revenues of CA$4.6m in 2020. This would be a sizeable 70% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analyst was forecasting revenues of CA$7.2m in 2020. It looks like forecasts have become a fair bit less optimistic on OneSoft Solutions, given the pretty serious reduction to revenue estimates.
View our latest analysis for OneSoft Solutions
Notably, the analyst has cut their price target 55% to CA$0.50, suggesting concerns around OneSoft Solutions' valuation.
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. Next year brings more of the same, according to the analyst, with revenue forecast to grow 70%, in line with its 60% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 16% per year. So it's pretty clear that OneSoft Solutions is forecast to grow substantially faster than its 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. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on OneSoft Solutions after today.
That said, this broker might have good reason to be negative on OneSoft Solutions, given dilutive stock issuance over the past year. Learn more, and discover the 5 other warning signs 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.
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.
