The analysts covering Digital Network SA (WSE:DIG) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
After the downgrade, the two analysts covering Digital Network are now predicting revenues of zł237m in 2026. If met, this would reflect a huge 31% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 31% to zł13.00. Previously, the analysts had been modelling revenues of zł278m and earnings per share (EPS) of zł14.83 in 2026. Indeed, we can see that the analysts are a lot more bearish about Digital Network's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
Check out our latest analysis for Digital Network
Despite the cuts to forecast earnings, there was no real change to the zł378 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Digital Network's rate of growth is expected to accelerate meaningfully, with the forecast 72% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 31% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Digital Network is expected to grow much faster than its industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Digital Network. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to 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 Digital Network.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Digital Network going out as far as 2028, 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 with high insider ownership.
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