Today is shaping up negative for Caesarstone Ltd. (NASDAQ:CSTE) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the consensus from two analysts covering Caesarstone is for revenues of US$534m in 2024, implying a considerable 10% decline in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$605m of revenue in 2024. The consensus view seems to have become more pessimistic on Caesarstone, noting the substantial drop in revenue estimates in this update.

See our latest analysis for Caesarstone

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Caesarstone's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 8.4% by the end of 2024. This indicates a significant reduction from annual growth of 4.6% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.0% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Caesarstone is expected to lag the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Caesarstone next year. They're also anticipating slower revenue growth than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Caesarstone after today.

Of course, there's always more to the story. At least one of Caesarstone's two analysts has provided estimates out to 2025, which can be seen 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.

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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.