Dialogue Health Technologies Inc. (TSE:CARE) Just Reported Earnings, And Analysts Cut Their Target Price

It's been a pretty great week for Dialogue Health Technologies Inc. (TSE:CARE) shareholders, with its shares surging 18% to CA$3.21 in the week since its latest quarterly results. The results look positive overall; while revenues of CA$24m were in line with analyst predictions, statutory losses were 5.0% smaller than expected, with Dialogue Health Technologies losing CA$0.09 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Dialogue Health Technologies

After the latest results, the ten analysts covering Dialogue Health Technologies are now predicting revenues of CA$125.0m in 2023. If met, this would reflect a huge 45% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 60% to CA$0.17. Before this earnings announcement, the analysts had been modelling revenues of CA$126.3m and losses of CA$0.18 per share in 2023.

As a result, it's unexpected to see that the consensus price target fell 16% to CA$5.03, with the analysts seemingly becoming more concerned about ongoing losses, despite making no major changes to their forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Dialogue Health Technologies, with the most bullish analyst valuing it at CA$8.50 and the most bearish at CA$3.50 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Dialogue Health Technologies' revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 35% growth on an annualised basis. This is compared to a historical growth rate of 49% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.7% annually. Even after the forecast slowdown in growth, it seems obvious that Dialogue Health Technologies is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 forecasts for Dialogue Health Technologies going out to 2024, and you can see them free on our platform here.

We also provide an overview of the Dialogue Health Technologies Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.