One Analyst Thinks Ten Lifestyle Group Plc’s (LON:TENG) Revenues Are Under Threat – Yahoo Finance

Market forces rained on the parade of Ten Lifestyle Group Plc (LON:TENG) shareholders today, when the covering analyst downgraded their 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.

Following the downgrade, the consensus from lone analyst covering Ten Lifestyle Group is for revenues of UK£43m in 2020, implying a considerable 17% decline in sales compared to the last 12 months. Before the latest update, the analyst was foreseeing UK£52m of revenue in 2020. It looks like forecasts have become a fair bit less optimistic on Ten Lifestyle Group, given the substantial drop in revenue estimates.

See our latest analysis for Ten Lifestyle Group

Notably, the analyst has cut their price target 5.6% to UK£1.52, suggesting concerns around Ten Lifestyle Group’s valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company’s valuation. The most optimistic Ten Lifestyle Group analyst has a price target of UK£1.82 per share, while the most pessimistic values it at UK£1.22. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 17%, a significant reduction from annual growth of 17% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 14% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining – Ten Lifestyle Group is expected to lag the wider industry.

The Bottom Line

The clear low-light was that the analyst slashing their revenue forecasts for Ten Lifestyle Group this year. They also expect company revenue to perform worse 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 Ten Lifestyle Group after today.

Of course, this isn’t the full story. We have forecasts for Ten Lifestyle Group from one covering analyst, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.