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Market forces rained on the parade of Carter Bankshares, Inc. (NASDAQ:CARE) shareholders today, when the analysts downgraded their forecasts for this year. 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 four analysts covering Carter Bankshares is for revenues of US$148m in 2023, implying a not inconsiderable 11% decline in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$175m in 2023. It looks like forecasts have become a fair bit less optimistic on Carter Bankshares, given the substantial drop in revenue estimates.
Check out our latest analysis for Carter Bankshares
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 sales are expected to reverse, with a forecast 20% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 9.8% 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 4.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Carter Bankshares is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Carter Bankshares after today.
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 Carter Bankshares' business, like recent substantial insider selling. For more information, you can click here to discover this and the 1 other risk we've identified.
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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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.
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