Healwell AI Inc. (TSE:AIDX) Analysts Are Reducing Their Forecasts For This Year

Market forces rained on the parade of Healwell AI Inc. (TSE:AIDX) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

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After this downgrade, Healwell AI's ten analysts are now forecasting revenues of CA$112m in 2025. This would be a major 34% improvement in sales compared to the last 12 months. Losses are expected to increase slightly, to CA$0.15 per share. However, before this estimates update, the consensus had been expecting revenues of CA$134m and CA$0.13 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 expecting losses per share to increase.

Check out our latest analysis for Healwell AI

The consensus price target was broadly unchanged at CA$3.41, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Healwell AI is forecast to grow faster in the future than it has in the past, with revenues expected to display 78% annualised growth until the end of 2025. If achieved, this would be a much better result than the 3.1% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 11% annually. Not only are Healwell AI's revenues expected to improve, it seems that the analysts are also expecting it 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 Healwell AI. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Healwell AI.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Healwell AI's financials, such as recent substantial insider selling. Learn more, and discover the 3 other risks 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 with high insider ownership.

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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.