Invacare Corporation (NYSE:IVC) Analysts Just Slashed Next Year's Estimates

Market forces rained on the parade of Invacare Corporation (NYSE:IVC) shareholders today, when the analysts downgraded their forecasts for next year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from two analysts covering Invacare is for revenues of US$735m in 2023, implying a measurable 6.6% decline in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 36% to US$1.34. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$826m and losses of US$0.87 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for Invacare

The consensus price target fell 49% to US$1.65, implicitly signalling that lower earnings per share are a leading indicator for Invacare's 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. The most optimistic Invacare analyst has a price target of US$2.00 per share, while the most pessimistic values it at US$1.30. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Invacare's past performance and to peers in the same industry. One more thing stood out to us about these estimates, and it's the idea that Invacare's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 5.3% to the end of 2023. This tops off a historical decline of 3.8% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 7.4% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Invacare to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Invacare going out as far as 2024, and you can see them 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.

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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.