These Analysts Just Made An Downgrade To Their Greenidge Generation Holdings Inc. (NASDAQ:GREE) EPS Forecasts

The analysts covering Greenidge Generation Holdings Inc. (NASDAQ:GREE) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

After this downgrade, Greenidge Generation Holdings' twin analysts are now forecasting revenues of US$159m in 2022. This would be a solid 19% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 69% to US$0.35. Prior to this update, the analysts had been forecasting revenues of US$211m and earnings per share (EPS) of US$0.46 in 2022. So we can see that the consensus has become notably more bearish on Greenidge Generation Holdings' outlook with these numbers, making a pretty serious reduction to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

View our latest analysis for Greenidge Generation Holdings

The consensus price target fell 49% to US$7.75, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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. There are some variant perceptions on Greenidge Generation Holdings, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$5.50 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. It's pretty clear that there is an expectation that Greenidge Generation Holdings' revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 26% growth on an annualised basis. This is compared to a historical growth rate of 378% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% annually. So it's pretty clear that, while Greenidge Generation Holdings' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest low-light for us was that the forecasts for Greenidge Generation Holdings dropped from profits to a loss this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better 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.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2024, which can be seen 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.