Today is shaping up negative for CorMedix Inc. (NYSEMKT:CRMD) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
After this downgrade, CorMedix's two analysts are now forecasting revenues of US$5.2m in 2020. This would be a substantial improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 50% to US$0.88. However, before this estimates update, the consensus had been expecting revenues of US$6.1m and US$0.87 per share in losses. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to this year's revenue estimates, while at the same time holding losses per share steady.
The consensus price target rose 8.3% to US$13.00, seeming to imply that weaker revenue sentiment is not expected to have a major impact on the company'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. Currently, the most bullish analyst values CorMedix at US$14.00 per share, while the most bearish prices it at US$12.00. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting CorMedix's growth to accelerate, with the forecast 25x growth ranking favourably alongside historical growth of 14% 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 6.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that CorMedix is expected to grow much faster than its industry.
The Bottom Line
While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of CorMedix going forwards.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with CorMedix's financials, such as dilutive stock issuance over the past year. Learn more, and discover the 3 other risks we've identified, for 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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