These Analysts Think HLS Therapeutics Inc.'s (TSE:HLS) Sales Are Under Threat

By
Simply Wall St
Published
January 22, 2021
TSX:HLS
Source: Shutterstock

Market forces rained on the parade of HLS Therapeutics Inc. (TSE:HLS) shareholders today, when the analysts downgraded their forecasts for next year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. The stock price has risen 8.4% to CA$17.90 over the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

After this downgrade, HLS Therapeutics' five analysts are now forecasting revenues of US$74m in 2021. This would be a substantial 37% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$84m of revenue in 2021. It looks like forecasts have become a fair bit less optimistic on HLS Therapeutics, given the substantial drop in revenue estimates.

Check out our latest analysis for HLS Therapeutics

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TSX:HLS Earnings and Revenue Growth January 23rd 2021

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. The analysts are definitely expecting HLS Therapeutics' growth to accelerate, with the forecast 37% growth ranking favourably alongside historical growth of 3.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect HLS Therapeutics to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for next year. The analysts also expect revenues to grow faster than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of HLS Therapeutics going forwards.

Unanswered questions? At least one of HLS Therapeutics' five analysts has provided estimates out to 2025, which can be seen 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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