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ATN International, Inc. (ATNI) - free report >>
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ATN International, Inc. (ATNI) - free report >>
Marathon Digital Holdings, Inc. (MARA) - free report >>
Bear of the Day: ATN International (ATNI)
Slower revenue growth has put a dent in the optimism surrounding ATN International’s (ATNI - Free Report) diverse business operations which consist of communication companies and renewable energy assets. Unfortunately, with ATN still striving to cross the profitability line this lands its stock a Zacks Rank #5 (Strong Sell) and the Bear of the Day.
Slower Sales Growth
An expansive top line is often indicative of a company’s future earnings potential and can catapult speculative high-growth stocks even before their profitable with Carvana (CVNA - Free Report) and crypto miners such as Marathon Digital (MARA - Free Report) and Riot Platforms (RIOT - Free Report) being recent examples.
However, when the revenue of a “speculative” stock slows and the company isn't turning a profit optimism in the market can fade quickly and this appears to be the case with ATNI shares.
Image Source: Zacks Investment Research
Looking at ATN’s outlook total sales are forecasted to dip -1% in fiscal 2024 to $755.16 million with the company expected to post an adjusted loss of -$0.29 a share. ATN is projected to post a profit of $0.30 a share next year but 2% sales growth is not overly reassuring.
Image Source: Zacks Investment Research
Q4 Earnings Miss & Declining EPS Estimates
Adding more concern to ATN’s profitability prospects is that the infrastructure and communication services provider came up short of its Q4 earnings expectations last week. ATN incurred a net loss -$5.8 million and an adjusted loss of -$0.12 a share compared to estimates of -$0.11 a share.
This was despite Q4 sales of $198.97 million topping estimates of $192.07 million and rising 3% year over year but wasn’t enough to push market sentiment. Furthermore, ATN has now missed earnings expectations in three of its last four quarterly reports.
Image Source: Zacks Investment Research
More concerning is that annual earnings estimates have fallen sharply following ATN’s Q4 report for both FY24 and FY25.
Image Source: Zacks Investment Research
Bottom Line
With ATN International’s stock down -13% in 2024 the slower revenue growth and declining earnings estimates are indicative that more short-term risk is ahead. ATN’s diverse operations should keep the company afloat but its prospects look less reassuring at the moment making its stock one to be avoid.