Today is shaping up negative for Gevo, Inc. (NASDAQ:GEVO) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After this downgrade, Gevo's four analysts are now forecasting revenues of US$18m in 2024. This would be a satisfactory 3.0% improvement in sales compared to the last 12 months. Losses are expected to increase substantially, hitting US$0.34 per share. However, before this estimates update, the consensus had been expecting revenues of US$20m and US$0.29 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Gevo's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 4.0% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 31% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 2.0% annually. So it looks like Gevo is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Gevo. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Gevo, and their negativity could be grounds for caution.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Gevo analysts - going out to 2026, and you can see them 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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