Yahoo Finance Downgrade: What You Need To Know About The Latest Peraso Inc. (NASDAQ:PRSO) Forecasts
The analyst covering Peraso Inc. (NASDAQ:PRSO) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory 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.
After this downgrade, Peraso's solitary analyst is now forecasting revenues of US$17m in 2023. This would be a decent 16% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 19% per share from last year to US$0.75 per share. However, before this estimates update, the consensus had been expecting revenues of US$20m and US$0.70 per share in losses. Ergo, there's been a clear change in sentiment, with the analyst administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.
View our latest analysis for Peraso
The consensus price target fell 33% to US$1.00, implicitly signalling that lower earnings per share are a leading indicator for Peraso's valuation.
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. The analyst is definitely expecting Peraso's growth to accelerate, with the forecast 34% annualised growth to the end of 2023 ranking favourably alongside historical growth of 26% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Peraso is expected to grow much faster than its industry.
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 Peraso. While the analyst did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The consensus price target fell measurably, with the analyst seemingly not reassured by recent business developments, leading to a lower estimate of Peraso's future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Peraso after today.
As you can see, this broker clearly isn't bullish, and there might be good reason for that. We've identified some potential issues with Peraso's financials, such as dilutive stock issuance over the past year. For more information, you can click here to discover this and the 2 other warning signs 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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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.
