CareCloud, Inc. (NASDAQ:CCLD) Just Reported First-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

Last week, you might have seen that CareCloud, Inc. (NASDAQ:CCLD) released its first-quarter result to the market. The early response was not positive, with shares down 2.8% to US$3.18 in the past week. It was a moderately negative result overall - revenue fell 2.9% short of analyst estimates at US$30m, although at least statutory losses were marginally smaller than expected, at US$0.28 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for CareCloud

Taking into account the latest results, the most recent consensus for CareCloud from six analysts is for revenues of US$142.8m in 2023 which, if met, would be a credible 7.0% increase on its sales over the past 12 months. Losses are supposed to decline, shrinking 14% from last year to US$0.63. Before this earnings announcement, the analysts had been modelling revenues of US$143.0m and losses of US$0.67 per share in 2023. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.

There's been no major changes to the consensus price target of US$9.08, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values CareCloud at US$13.00 per share, while the most bearish prices it at US$5.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 would highlight that CareCloud's revenue growth is expected to slow, with the forecast 9.4% annualised growth rate until the end of 2023 being well below the historical 27% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than CareCloud.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$9.08, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple CareCloud analysts - going out to 2025, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for CareCloud you should be aware of.

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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.