Mach7 Technologies Limited (ASX:M7T) Analysts Are More Bearish Than They Used To Be

Today is shaping up negative for Mach7 Technologies Limited (ASX:M7T) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the latest downgrade, the current consensus, from the five analysts covering Mach7 Technologies, is for revenues of AU$29m in 2024, which would reflect a perceptible 4.6% reduction in Mach7 Technologies' sales over the past 12 months. Losses are supposed to balloon 586% to AU$0.03 per share. Yet before this consensus update, the analysts had been forecasting revenues of AU$36m and losses of AU$0.012 per share in 2024. 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.

See our latest analysis for Mach7 Technologies

There was no major change to the consensus price target of AU$1.22, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Mach7 Technologies' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 4.6% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 26% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 19% annually for the foreseeable future. It's pretty clear that Mach7 Technologies' revenues are expected to perform substantially worse 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 Mach7 Technologies. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Mach7 Technologies after the downgrade.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Mach7 Technologies analysts - going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.