Greenidge Generation Holdings Inc. (NASDAQ:GREE) Analysts Are More Bearish Than They Used To Be

The latest analyst coverage could presage a bad day for Greenidge Generation Holdings Inc. (NASDAQ:GREE), with the analysts 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 analysts seeing grey clouds on the horizon.

After the downgrade, the consensus from Greenidge Generation Holdings' twin analysts is for revenues of US$126m in 2022, which would reflect a definite 16% decline in sales compared to the last year of performance. Losses are forecast to narrow 9.5% to US$3.32 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$141m and losses of US$2.74 per share in 2022. 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.

Our analysis indicates that GREE is potentially overvalued!

The consensus price target fell 30% to US$3.50, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Greenidge Generation Holdings at US$5.00 per share, while the most bearish prices it at US$3.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Greenidge Generation Holdings shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Greenidge Generation Holdings' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 29% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 277% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 13% annually for the foreseeable future. It's pretty clear that Greenidge Generation Holdings' revenues are expected to perform substantially 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 this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Greenidge Generation Holdings.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Greenidge Generation Holdings, including dilutive stock issuance over the past year. Learn more, and discover the 3 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.

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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.