DarioHealth Corp. (NASDAQ:DRIO) Analysts Just Trimmed Their Revenue Forecasts By 13%
The latest analyst coverage could presage a bad day for DarioHealth Corp. (NASDAQ:DRIO), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. 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 five analysts covering DarioHealth are now predicting revenues of US$31m in 2024. If met, this would reflect a substantial 30% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 26% to US$1.64 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$35m and losses of US$1.64 per share in 2024. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to next year's revenue estimates, while at the same time holding losses per share steady.
See our latest analysis for DarioHealth
The consensus price target fell 9.2% to US$7.10, with the analysts clearly concerned about the weaker revenue outlook and expectation of ongoing losses.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that DarioHealth's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 23% growth on an annualised basis. This is compared to a historical growth rate of 34% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% annually. So it's pretty clear that, while DarioHealth's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of DarioHealth's future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on DarioHealth after today.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with DarioHealth, including dilutive stock issuance over the past year. For more information, you can click here to discover this and the 3 other warning signs 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.
