Market forces rained on the parade of Argo Blockchain plc (LON:ARB) 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 latest downgrade, the current consensus, from the three analysts covering Argo Blockchain, is for revenues of US$50m in 2024, which would reflect an uncomfortable 10% reduction in Argo Blockchain's sales over the past 12 months. Before the latest update, the analysts were foreseeing US$56m of revenue in 2024. The consensus view seems to have become more pessimistic on Argo Blockchain, noting the measurable cut to revenue estimates in this update.

See our latest analysis for Argo Blockchain

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Argo Blockchain's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 19% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 20% 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 10% per year. It's pretty clear that Argo Blockchain'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 cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Argo Blockchain 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 Argo Blockchain's business, like dilutive stock issuance over the past year. Learn more, and discover the 3 other flags we've identified, for 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 with high insider ownership.

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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.