Today is shaping up negative for Tremor International Ltd (LON:TRMR) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After the downgrade, the four analysts covering Tremor International are now predicting revenues of US$342m in 2023. If met, this would reflect a satisfactory 2.3% improvement in sales compared to the last 12 months. Losses are expected to increase substantially, hitting US$0.15 per share. Prior to this update, the analysts had been forecasting revenues of US$419m and earnings per share (EPS) of US$0.18 in 2023. There looks to have been a major change in sentiment regarding Tremor International's prospects, with a substantial drop in revenues and the analysts now forecasting a loss instead of a profit.

Check out our latest analysis for Tremor International

The consensus price target fell 23% to US$11.18, implicitly signalling that lower earnings per share are a leading indicator for Tremor International's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Tremor International analyst has a price target of US$12.80 per share, while the most pessimistic values it at US$8.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 can infer from the latest estimates that forecasts expect a continuation of Tremor International'shistorical trends, as the 4.6% annualised revenue growth to the end of 2023 is roughly in line with the 4.5% annual revenue growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 4.5% per year. It's clear that while Tremor International's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The most important thing to take away is that analysts are expecting Tremor International to become unprofitable this year. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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 Tremor International.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Tremor International analysts - going out to 2024, and you can see them 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 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.