Market forces rained on the parade of Inseego Corp. (NASDAQ:INSG) shareholders today, when the analysts downgraded their forecasts for next year.   Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.    

Following the latest downgrade, the three analysts covering Inseego provided consensus estimates of US$193m revenue in 2024, which would reflect a discernible 6.5% decline on its sales over the past 12 months.      Losses are predicted to fall substantially, shrinking 36% to US$0.27 per share.       However, before this estimates update, the consensus had been expecting revenues of US$238m and US$0.16 per share in losses.         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 Inseego

NasdaqGS:INSG Earnings and Revenue Growth November 8th 2023

The consensus price target fell 18% to US$1.12, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.    

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.     These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 5.2% by the end of 2024. This indicates a significant reduction from annual growth of 3.1% over the last five years.    By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.3% annually for the foreseeable future.  It's pretty clear that Inseego's revenues are expected to perform substantially worse than the wider industry.    

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 Inseego.        Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Inseego's revenues are expected to grow slower than the wider market.        With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Inseego.  

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Inseego, including dilutive stock issuance over the past year.   For more information, you can click here to discover this and the 3 other flags we've identified.

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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