Newsflash: Sarcos Technology and Robotics Corporation (NASDAQ:STRC) Analysts Have Been Trimming Their Revenue Forecasts

Market forces rained on the parade of Sarcos Technology and Robotics Corporation (NASDAQ:STRC) shareholders today, when the analysts downgraded their 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 Sarcos Technology and Robotics from its three analysts is for revenues of US$23m in 2023 which, if met, would be a sizeable 45% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 51% to US$0.51. However, before this estimates update, the consensus had been expecting revenues of US$27m and US$0.48 per share in losses. 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 Sarcos Technology and Robotics

The consensus price target fell 20% to US$2.75, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Sarcos Technology and Robotics at US$4.25 per share, while the most bearish prices it at US$2.00. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Sarcos Technology and Robotics' revenue growth is expected to slow, with the forecast 64% annualised growth rate until the end of 2023 being well below the historical 301% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.9% annually. So it's pretty clear that, while Sarcos Technology and Robotics' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. 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 Sarcos Technology and Robotics after today.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Sarcos Technology and Robotics going out to 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.