These Analysts Think ProSight Global, Inc.'s (NYSE:PROS) Sales Are Under Threat
Today is shaping up negative for ProSight Global, Inc. (NYSE:PROS) shareholders, with the analysts delivering a substantial negative revision to next 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 the downgrade, the consensus from ProSight Global's three analysts is for revenues of US$813m in 2021, which would reflect a measurable 3.4% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of US$914m in 2021. It looks like forecasts have become a fair bit less optimistic on ProSight Global, given the substantial drop in revenue estimates.
View our latest analysis for ProSight Global
The consensus price target rose 6.8% to US$15.67, with the analysts clearly more optimistic about ProSight Global's prospects following this update. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values ProSight Global at US$17.00 per share, while the most bearish prices it at US$14.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting ProSight Global is an easy business to forecast or the underlying assumptions are obvious.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 3.4% revenue decline a notable change from historical growth of 8.9% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.2% annually for the foreseeable future. It's pretty clear that ProSight Global's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for ProSight Global next year. They also expect company revenue to perform worse than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of ProSight Global going forwards.
Want to learn more? We have estimates for ProSight Global from its three analysts out until 2022, and you can see them free on our platform here.
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This article by Simply Wall St is general in nature. 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.
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