Need To Know: The Consensus Just Cut Its Sonendo, Inc. (NYSE:SONX) Estimates For 2024
Today is shaping up negative for Sonendo, Inc. (NYSE:SONX) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. At US$0.29, shares are up 5.8% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.
Following the downgrade, the current consensus from Sonendo's five analysts is for revenues of US$49m in 2024 which - if met - would reflect a meaningful 11% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 61% to US$0.46. However, before this estimates update, the consensus had been expecting revenues of US$60m and US$0.49 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also reducing the estimated losses the business will incur.
View our latest analysis for Sonendo
There was no major change to the US$1.99 average analyst price target, suggesting that the adjustments to revenue and earnings are not expected to have a long-term impact on the business.
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. We would highlight that Sonendo's revenue growth is expected to slow, with the forecast 8.3% annualised growth rate until the end of 2024 being well below the historical 21% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.7% annually. Factoring in the forecast slowdown in growth, it looks like Sonendo is forecast to grow at about the same rate as the wider industry.
The Bottom Line
Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Sonendo going forwards.
There might be good reason for analyst bearishness towards Sonendo, like dilutive stock issuance over the past year. Learn more, and discover the 3 other concerns 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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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.
