Downgrade: Here's How Analysts See Thoughtworks Holding, Inc. (NASDAQ:TWKS) Performing In The Near Term

Today is shaping up negative for Thoughtworks Holding, Inc. (NASDAQ:TWKS) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the consensus from Thoughtworks Holding's eight analysts is for revenues of US$991m in 2024, which would reflect a definite 12% decline in sales compared to the last year of performance. The loss per share is anticipated to greatly reduce in the near future, narrowing 60% to US$0.086. Before this latest update, the analysts had been forecasting revenues of US$1.1b and earnings per share (EPS) of US$0.09 in 2024. So we can see that the consensus has become notably more bearish on Thoughtworks Holding's outlook with these numbers, making a measurable cut 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.

Check out our latest analysis for Thoughtworks Holding

The consensus price target fell 14% to US$4.74, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 12% by the end of 2024. This indicates a significant reduction from annual growth of 13% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.4% per year. It's pretty clear that Thoughtworks Holding's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Thoughtworks Holding dropped from profits to a loss this 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 estimates - from multiple Thoughtworks Holding analysts - going out to 2026, 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.