The latest analyst coverage could presage a bad day for Identiv, Inc. (NASDAQ:INVE), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the latest downgrade, the four analysts covering Identiv provided consensus estimates of US$102m revenue in 2024, which would reflect a considerable 9.4% decline on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$0.57 per share. However, before this estimates update, the consensus had been expecting revenues of US$118m and US$0.22 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.
The consensus price target fell 5.3% to US$8.88, implicitly signalling that lower earnings per share are a leading indicator for Identiv's valuation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Identiv's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 12% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 8.8% 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 6.2% annually for the foreseeable future. It's pretty clear that Identiv's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Identiv's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Identiv.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Identiv analysts - going out to 2026, 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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