Things Look Grim For Mondee Holdings, Inc. (NASDAQ:MOND) After Today's Downgrade

Market forces rained on the parade of Mondee Holdings, Inc. (NASDAQ:MOND) shareholders today, when the analysts downgraded their forecasts for next year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the current consensus from Mondee Holdings' four analysts is for revenues of US$252m in 2024 which - if met - would reflect a huge 29% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 61% to US$0.34 per share. However, before this estimates update, the consensus had been expecting revenues of US$319m and US$0.20 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for Mondee Holdings

The consensus price target fell 40% to US$6.05, implicitly signalling that lower earnings per share are a leading indicator for Mondee Holdings' valuation.

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. It's pretty clear that there is an expectation that Mondee Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 22% growth on an annualised basis. This is compared to a historical growth rate of 35% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% per year. Even after the forecast slowdown in growth, it seems obvious that Mondee Holdings is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for next year. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Mondee Holdings going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.