Analysts Have Just Cut Their Teneo AI AB (publ) (STO:TENEO) Revenue Estimates By 19%

Today is shaping up negative for Teneo AI AB (publ) (STO:TENEO) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Following the latest downgrade, the current consensus, from the twin analysts covering Teneo AI, is for revenues of kr99m in 2025, which would reflect an uneasy 17% reduction in Teneo AI's sales over the past 12 months. Losses are expected to be contained, narrowing 16% per share from last year to kr0.12 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of kr122m and losses of kr0.11 per share in 2025. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

See our latest analysis for Teneo AI

The consensus price target fell 6.4% to kr1.10, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

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 sales are expected to reverse, with a forecast 31% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 16% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.9% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Teneo AI is expected to lag 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 Teneo AI. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Teneo AI's revenues are expected to grow slower 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 Teneo AI after today.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Teneo AI, including major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 3 other risks 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 with high insider ownership.

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

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.