The analysts covering BlackBerry Limited (TSE:BB) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. Shares are up 7.2% to US$5.77 in the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.
After the downgrade, the consensus from BlackBerry's ten analysts is for revenues of US$990m in 2021, which would reflect a discernible 4.8% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of US$1.2b in 2021. The consensus view seems to have become more pessimistic on BlackBerry, noting the substantial drop in revenue estimates in this update.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would also point out that the forecast 4.8% revenue decline is better than the historical trend, which saw revenues shrink -29% annually over the past five years
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for BlackBerry this year. They're also anticipating slower revenue growth than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on BlackBerry, and their negativity could be grounds for caution.
Unanswered questions? We have estimates for BlackBerry from its ten analysts out until 2022, and you can see them 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.
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