Downgrade: Here's How Analysts See DarioHealth Corp. (NASDAQ:DRIO) Performing In The Near Term

The latest analyst coverage could presage a bad day for DarioHealth Corp. (NASDAQ:DRIO), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

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Following the latest downgrade, the current consensus, from the four analysts covering DarioHealth, is for revenues of US$24m in 2025, which would reflect a chunky 11% reduction in DarioHealth's sales over the past 12 months. Losses are supposed to balloon 24% to US$0.98 per share. However, before this estimates update, the consensus had been expecting revenues of US$32m and US$0.83 per share in losses. 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.

See our latest analysis for DarioHealth

The consensus price target fell 17% to US$1.96, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 20% by the end of 2025. This indicates a significant reduction from annual growth of 17% 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 10% per year. It's pretty clear that DarioHealth's revenues are expected to perform substantially worse than the wider industry.

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, and industry data suggests that DarioHealth's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of DarioHealth.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with DarioHealth, including a short cash runway. Learn more, and discover the 2 other warning signs we've identified, for free on our platform here.

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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.