These Analysts Think HTG Molecular Diagnostics, Inc.'s (NASDAQ:HTGM) Sales Are Under Threat

Today is shaping up negative for HTG Molecular Diagnostics, Inc. (NASDAQ:HTGM) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the most recent consensus for HTG Molecular Diagnostics from its four analysts is for revenues of US$11m in 2021 which, if met, would be a credible 2.9% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$15m of revenue in 2021. The consensus view seems to have become more pessimistic on HTG Molecular Diagnostics, noting the pretty serious reduction to revenue estimates in this update.

Check out our latest analysis for HTG Molecular Diagnostics

Notably, the analysts have cut their price target 7.8% to US$11.75, suggesting concerns around HTG Molecular Diagnostics' valuation. 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. There are some variant perceptions on HTG Molecular Diagnostics, with the most bullish analyst valuing it at US$15.00 and the most bearish at US$6.00 per share. 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.

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. It's pretty clear that there is an expectation that HTG Molecular Diagnostics' revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 2.9% growth on an annualised basis. This is compared to a historical growth rate of 28% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 16% 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 HTG Molecular Diagnostics.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for HTG Molecular Diagnostics this year. They're also anticipating slower revenue growth 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. Given the stark change in sentiment, we'd understand if investors became more cautious on HTG Molecular Diagnostics after today.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with HTG Molecular Diagnostics' financials, such as major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 3 other flags we've identified.

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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