Today is shaping up negative for Kornit Digital Ltd. (NASDAQ:KRNT) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the current consensus from Kornit Digital's six analysts is for revenues of US$245m in 2024 which - if met - would reflect a decent 8.3% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 79% to US$0.33. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$290m and losses of US$0.27 per share in 2024. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

See our latest analysis for Kornit Digital

The consensus price target fell 12% to US$26.17, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

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. We would highlight that Kornit Digital's revenue growth is expected to slow, with the forecast 6.6% annualised growth rate until the end of 2024 being well below the historical 14% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.7% per year. So it's pretty clear that, while Kornit Digital's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at Kornit Digital. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Kornit Digital.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Kornit Digital analysts - going out to 2025, 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.

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