Alcidion Group Limited (ASX:ALC) Just Reported And Analysts Have Been Cutting Their Estimates

Last week saw the newest half-yearly earnings release from Alcidion Group Limited (ASX:ALC), an important milestone in the company's journey to build a stronger business. It was a negative result overall, with revenues coming in 17% less than what the analysts expected, at AU$19m. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Alcidion Group

Taking into account the latest results, the most recent consensus for Alcidion Group from dual analysts is for revenues of AU$42.6m in 2023 which, if met, would be a reasonable 5.2% increase on its sales over the past 12 months. Before this earnings report, the analysts had been forecasting revenues of AU$45.8m and earnings per share (EPS) of AU$0.00065 in 2023. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a earnings per share estimates.

We'd also point out that thatthe analysts have made no major changes to their price target of AU$0.20.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Alcidion Group's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Alcidion Group's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 11% 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 19% per year. Factoring in the forecast slowdown in growth, it seems obvious that Alcidion Group is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at AU$0.20, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for Alcidion Group going out as far as 2025, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.