These Analysts Think Assertio Holdings, Inc.'s (NASDAQ:ASRT) Earnings Are Under Threat
Today is shaping up negative for Assertio Holdings, Inc. (NASDAQ:ASRT) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business. Investors however, have been notably more optimistic about Assertio Holdings recently, with the stock price up a notable 28% to US$1.14 in the past week. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.
After the downgrade, the consensus from Assertio Holdings' dual analysts is for revenues of US$117m in 2024, which would reflect a stressful 23% decline in sales compared to the last year of performance. The loss per share is anticipated to greatly reduce in the near future, narrowing 97% to US$0.12. Before this latest update, the analysts had been forecasting revenues of US$161m and earnings per share (EPS) of US$0.16 in 2024. So we can see that the consensus has become notably more bearish on Assertio Holdings' outlook with these numbers, making a pretty serious reduction to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.
See our latest analysis for Assertio Holdings
The consensus price target fell 14% to US$3.00, implicitly signalling that lower earnings per share are a leading indicator for Assertio Holdings' valuation.
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. One more thing stood out to us about these estimates, and it's the idea that Assertio Holdings' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 23% to the end of 2024. This tops off a historical decline of 7.0% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 9.0% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Assertio Holdings to suffer worse than the wider industry.
The Bottom Line
The biggest low-light for us was that the forecasts for Assertio Holdings dropped from profits to a loss this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Assertio Holdings.
That said, the analysts might have good reason to be negative on Assertio Holdings, given major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 2 other risks 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 that insiders are buying.
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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.
