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One thing we could say about the analysts on Motus GI Holdings, Inc. (NASDAQ:MOTS) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
After the downgrade, the six analysts covering Motus GI Holdings are now predicting revenues of US$652k in 2020. If met, this would reflect a substantial 387% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 23% to US$0.66. However, before this estimates update, the consensus had been expecting revenues of US$1.0m and US$0.59 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Motus GI Holdings'historical trends, as next year's 4x revenue growth is roughly in line with 441% annual revenue growth over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.8% per year. So although Motus GI Holdings is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Motus GI Holdings. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Motus GI Holdings, and a few readers might choose to steer clear of the stock.
That said, the analysts might have good reason to be negative on Motus GI Holdings, given dilutive stock issuance over the past year. Learn more, and discover the 4 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. 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. Thank you for reading.