Today is shaping up negative for Payfare Inc. (TSE:PAY) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the latest downgrade, the current consensus, from the two analysts covering Payfare, is for revenues of CA$64m in 2025, which would reflect a stressful 71% reduction in Payfare's sales over the past 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of CA$0.22 per share in 2025. Yet before this consensus update, the analysts had been forecasting revenues of CA$90m and losses of CA$0.13 per share in 2025. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for Payfare

The consensus price target fell 38% to CA$3.00, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Payfare's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 63% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 54% 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 15% annually for the foreseeable future. It's pretty clear that Payfare's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at Payfare. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Payfare's revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

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 Payfare going out as far as 2025, and you can see them free on our platform here.