Stock Analysis

Need To Know: This Analyst Just Made A Substantial Cut To Their Streamline Health Solutions, Inc. (NASDAQ:STRM) Estimates

NasdaqCM:STRM
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The latest analyst coverage could presage a bad day for Streamline Health Solutions, Inc. (NASDAQ:STRM), with the covering analyst 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 the analyst seeing grey clouds on the horizon.

Following the downgrade, the current consensus from Streamline Health Solutions' one analyst is for revenues of US$20m in 2023 which - if met - would reflect a major 40% increase on its sales over the past 12 months. Losses are expected to increase substantially, hitting US$0.22 per share. Yet before this consensus update, the analyst had been forecasting revenues of US$23m and losses of US$0.15 per share in 2023. Ergo, there's been a clear change in sentiment, with the analyst administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out our latest analysis for Streamline Health Solutions

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NasdaqCM:STRM Earnings and Revenue Growth December 11th 2021

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. For example, we noticed that Streamline Health Solutions' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 31% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 19% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 17% annually. So it looks like Streamline Health Solutions is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at Streamline Health Solutions. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After a cut like that, investors could be forgiven for thinking the analyst is a lot more bearish on Streamline Health Solutions, and a few readers might choose to steer clear of the stock.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Streamline Health Solutions' business, like major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 3 other risks 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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Find out whether Streamline Health Solutions is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.