The latest analyst coverage could presage a bad day for H2APEX Group SCA (ETR:H2A), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the most recent consensus for H2APEX Group from its three analysts is for revenues of €35m in 2024 which, if met, would be a notable 11% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 25% to €0.62 per share. Yet before this consensus update, the analysts had been forecasting revenues of €35m and losses of €0.62 per share in 2024. So it looks like there's been no real change in sentiment in this consensus update, with the analysts reconfirming both their revenue and loss per share numbers.

Check out our latest analysis for H2APEX Group

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that H2APEX Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 433% over the past year. Compare this to the 23 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 11% per year. So it's pretty clear that, while H2APEX Group's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around H2APEX Group's prospects. Happily, there wasn't any change to sales forecasts, with the business still expected to grow in line with the overall market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on H2APEX Group, and we wouldn't blame shareholders for feeling a little more cautious themselves.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with H2APEX Group's business, like a short cash runway. Learn more, and discover the 1 other risk we've identified, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.