Akerna Corp. (NASDAQ:KERN) Analysts Just Slashed This Year's Revenue Estimates By 12%

Today is shaping up negative for Akerna Corp. (NASDAQ:KERN) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the latest downgrade, Akerna's three analysts currently expect revenues in 2022 to be US$25m, approximately in line with the last 12 months. Losses are expected to increase substantially, hitting US$1.01 per share. However, before this estimates update, the consensus had been expecting revenues of US$28m and US$0.96 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.

View our latest analysis for Akerna

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Akerna's past performance and to peers in the same industry. We would highlight that Akerna's revenue growth is expected to slow, with the forecast 0.5% annualised growth rate until the end of 2022 being well below the historical 24% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 14% annually. Factoring in the forecast slowdown in growth, it seems obvious that Akerna is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Akerna's revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Akerna going forwards.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Akerna's business, like major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 3 other flags we've identified.

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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.