Stock Analysis

Revenue Downgrade: Here's What Analysts Forecast For Streamline Health Solutions, Inc. (NASDAQ:STRM)

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The analysts covering Streamline Health Solutions, Inc. (NASDAQ:STRM) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Investors however, have been notably more optimistic about Streamline Health Solutions recently, with the stock price up a remarkable 27% to US$0.40 in the past week. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.

Following the latest downgrade, the two analysts covering Streamline Health Solutions provided consensus estimates of US$22m revenue in 2025, which would reflect a chunky 8.8% decline on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 66% to US$0.12 per share. However, before this estimates update, the consensus had been expecting revenues of US$28m and US$0.12 per share in losses. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to next year's revenue estimates, while at the same time holding losses per share steady.

Check out our latest analysis for Streamline Health Solutions

NasdaqCM:STRM Earnings and Revenue Growth December 16th 2023

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. We would highlight that sales are expected to reverse, with a forecast 7.1% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 8.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 10% annually for the foreseeable future. It's pretty clear that Streamline Health Solutions' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Streamline Health Solutions going forwards.

There might be good reason for analyst bearishness towards Streamline Health Solutions, like a short cash runway. Learn more, and discover the 2 other risks we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

Valuation is complex, but we're helping make it simple.

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.