Market forces rained on the parade of Navitas Semiconductor Corporation (NASDAQ:NVTS) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After the downgrade, the consensus from Navitas Semiconductor's eight analysts is for revenues of US$77m in 2025, which would reflect an uneasy 8.0% decline in sales compared to the last year of performance. Losses are supposed to balloon 20% to US$0.54 per share. However, before this estimates update, the consensus had been expecting revenues of US$89m and US$0.53 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts 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 Navitas Semiconductor

The consensus price target was broadly unchanged at US$3.73, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 8.0% by the end of 2025. This indicates a significant reduction from annual growth of 46% 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 17% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Navitas Semiconductor is expected to lag 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 Navitas Semiconductor's revenues are expected to grow slower 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 Navitas Semiconductor after today.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Navitas Semiconductor, including recent substantial insider selling. Learn more, and discover the 2 other warning signs 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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