Today is shaping up negative for Harte Gold Corp. (TSE:HRT) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as the analyst signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Investors however, have been notably more optimistic about Harte Gold recently, with the stock price up an extraordinary 33% to CA$0.16 in the past week. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.
Following the latest downgrade, the solitary analyst covering Harte Gold provided consensus estimates of CA$45m revenue in 2020, which would reflect a disturbing 21% decline on its sales over the past 12 months. Prior to the latest estimates, the analyst was forecasting revenues of CA$79m in 2020. It looks like forecasts have become a fair bit less optimistic on Harte Gold, given the pretty serious reduction to revenue estimates.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Harte Gold's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 21%, a significant reduction from annual growth of 596% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.9% annually for the foreseeable future. It's pretty clear that Harte Gold's revenues are expected to perform substantially worse 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're also anticipating slower revenue growth than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Harte Gold going forwards.
As you can see, this broker clearly isn't bullish, and there might be good reason for that. We've identified some potential issues with Harte Gold's financials, such as dilutive stock issuance over the past year. Learn more, and discover the 4 other risks 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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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