Nogin, Inc. (NASDAQ:NOGN) Analysts Just Cut Their EPS Forecasts Substantially

The analysts covering Nogin, Inc. (NASDAQ:NOGN) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

After the downgrade, the consensus from Nogin's three analysts is for revenues of US$54m in 2023, which would reflect a sizeable 31% decline in sales compared to the last year of performance. The loss per share is anticipated to greatly reduce in the near future, narrowing 25% to US$3.64. However, before this estimates update, the consensus had been expecting revenues of US$70m and US$3.20 per share in losses. 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 Nogin

The consensus price target fell 55% to US$2.50, implicitly signalling that lower earnings per share are a leading indicator for Nogin's valuation.

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. One more thing stood out to us about these estimates, and it's the idea that Nogin's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 53% to the end of 2023. This tops off a historical decline of 34% a year over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 11% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Nogin to suffer 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 Nogin. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Nogin's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Nogin.

There might be good reason for analyst bearishness towards Nogin, like major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 1 other concern we've identified.

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.

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.