Analysts Just Made A Major Revision To Their Sedana Medical AB (publ) (STO:SEDANA) Revenue Forecasts

Today is shaping up negative for Sedana Medical AB (publ) (STO:SEDANA) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Investors however, have been notably more optimistic about Sedana Medical recently, with the stock price up a notable 18% to kr25.76 in the past week. With such a sharp increase, it seems brokers may have seen something that is not yet being priced in by the wider market.

After the downgrade, the dual analysts covering Sedana Medical are now predicting revenues of kr148m in 2023. If met, this would reflect a notable 16% improvement in sales compared to the last 12 months. Losses are supposed to balloon 37% to kr0.97 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of kr165m and losses of kr0.94 per share in 2023. 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.

Check out our latest analysis for Sedana Medical

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Sedana Medical'shistorical trends, as the 22% annualised revenue growth to the end of 2023 is roughly in line with the 22% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 12% per year. So although Sedana Medical is expected to maintain its revenue growth rate, it's definitely 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 Sedana Medical. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Sedana Medical going forwards.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Sedana Medical going out as far as 2025, and you can see them 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.