Some Venus Concept Inc. (NASDAQ:VERO) Analysts Just Made A Major Cut To Next Year's Estimates

Market forces rained on the parade of Venus Concept Inc. (NASDAQ:VERO) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the current consensus, from the three analysts covering Venus Concept, is for revenues of US$91m in 2023, which would reflect a chunky 8.2% reduction in Venus Concept's sales over the past 12 months. Losses are predicted to fall substantially, shrinking 29% to US$0.39. However, before this estimates update, the consensus had been expecting revenues of US$104m and US$0.34 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

See our latest analysis for Venus Concept

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 8.2% by the end of 2023. This indicates a significant reduction from annual growth of 1.0% 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 7.5% per year. It's pretty clear that Venus Concept's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Venus Concept. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Venus Concept, and a few readers might choose to steer clear of the stock.

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 Venus Concept's financials, such as a short cash runway. Learn more, and discover the 4 other concerns we've identified, for free on our platform here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.