Analyst Forecasts Just Became More Bearish On mCloud Technologies Corp. (CVE:MCLD)

Today is shaping up negative for mCloud Technologies Corp. (CVE:MCLD) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the two analysts covering mCloud Technologies are now predicting revenues of CA$57m in 2022. If met, this would reflect a sizeable 83% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CA$69m in 2022. The consensus view seems to have become more pessimistic on mCloud Technologies, noting the substantial drop in revenue estimates in this update.

See our latest analysis for mCloud Technologies

Notably, the analysts have cut their price target 26% to CA$10.00, suggesting concerns around mCloud Technologies' 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. We would highlight that mCloud Technologies' revenue growth is expected to slow, with the forecast 62% annualised growth rate until the end of 2022 being well below the historical 78% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 14% per year. So it's pretty clear that, while mCloud Technologies' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for mCloud Technologies next year. They're also forecasting more rapid revenue growth than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of mCloud Technologies' future valuation. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of mCloud Technologies going forwards.

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 mCloud Technologies' financials, such as major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 3 other concerns we've identified.

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.

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.

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