Market forces rained on the parade of Aemetis, Inc. (NASDAQ:AMTX) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business. Investors however, have been notably more optimistic about Aemetis recently, with the stock price up a noteworthy 13% to US$2.00 in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

Following the downgrade, the latest consensus from Aemetis' five analysts is for revenues of US$358m in 2025, which would reflect a substantial 34% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 23% to US$1.27. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$454m and losses of US$0.74 per share in 2025. 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.

There was no major change to the consensus price target of US$14.19, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Aemetis' growth to accelerate, with the forecast 34% annualised growth to the end of 2025 ranking favourably alongside historical growth of 7.5% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Aemetis is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Aemetis.

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 Aemetis' business, like a short cash runway. For more information, you can click here to discover this and the 1 other concern 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 with high insider ownership.

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.