Spectral AI, Inc. (NASDAQ:MDAI) Released Earnings Last Week And Analysts Lifted Their Price Target To US$5.09

Spectral AI, Inc. (NASDAQ:MDAI) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Revenues missed expectations somewhat, coming in at US$5.1m, but statutory earnings fell catastrophically short, with a loss of US$0.31 some 287% larger than what the analysts had predicted. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following the recent earnings report, the consensus from five analysts covering Spectral AI is for revenues of US$21.7m in 2025. This implies a painful 21% decline in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 28% to US$0.39. Before this latest report, the consensus had been expecting revenues of US$21.9m and US$0.14 per share in losses. While this year's revenue estimates held steady, there was also a massive increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

See our latest analysis for Spectral AI

Despite expectations of heavier losses next year,the analysts have lifted their price target 6.3% to US$5.09, perhaps implying these losses are not expected to be recurring over the long term. 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. The most optimistic Spectral AI analyst has a price target of US$7.45 per share, while the most pessimistic values it at US$3.50. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 38% annualised decline to the end of 2025. That is a notable change from historical growth of 9.3% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 8.2% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Spectral AI is expected to lag the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Spectral AI. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Spectral AI's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 forecasts for Spectral AI going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 4 warning signs for Spectral AI (2 are significant!) that we have uncovered.

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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.