Newsflash: Median Technologies SA (EPA:ALMDT) Analysts Have Been Trimming Their Revenue Forecasts

The analysts covering Median Technologies SA (EPA:ALMDT) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the most recent consensus for Median Technologies from its three analysts is for revenues of €26m in 2023 which, if met, would be a solid 9.0% increase on its sales over the past 12 months. Per-share losses are expected to creep up to €1.34. However, before this estimates update, the consensus had been expecting revenues of €30m and €1.25 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.

View our latest analysis for Median Technologies

The consensus price target fell 14% to €29.03, implicitly signalling that lower earnings per share are a leading indicator for Median Technologies' valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Median Technologies, with the most bullish analyst valuing it at €40.00 and the most bearish at €21.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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. We would highlight that Median Technologies' revenue growth is expected to slow, with the forecast 9.0% annualised growth rate until the end of 2023 being well below the historical 30% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.9% per year. Even after the forecast slowdown in growth, it seems obvious that Median Technologies is also expected 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 Median Technologies. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Median Technologies after today.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Median Technologies, including dilutive stock issuance over the past year. 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 that insiders are buying.

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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.