The analysts covering mCloud Technologies Corp. (CVE:MCLD) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
After this downgrade, mCloud Technologies' four analysts are now forecasting revenues of CA$70m in 2021. This would be a sizeable improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CA$83m in 2021. It looks like forecasts have become a fair bit less optimistic on mCloud Technologies, given the measurable cut to revenue estimates.
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. The analysts are definitely expecting mCloud Technologies' growth to accelerate, with the forecast 7x growth ranking favourably alongside historical growth of 421% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect mCloud Technologies 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. They're also forecasting more rapid revenue growth than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on mCloud Technologies after today.
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 2 other risks we've identified.
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