There’s been a major selloff in Streamline Health Solutions, Inc. (NASDAQ:STRM) shares in the week since it released its quarterly report, with the stock down 22% to US$0.78. Revenues of US$5.8m came in a modest 3.6% below forecasts. Statutory losses were a relative bright spot though, with a per-share loss of US$0.04 coming in a substantial 27% smaller than what the analysts had expected. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following last week’s earnings report, Streamline Health Solutions’ twin analysts are forecasting 2024 revenues to be US$24.0m, approximately in line with the last 12 months. Losses are supposed to decline, shrinking 16% from last year to US$0.16. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$25.2m and losses of US$0.17 per share in 2024. It looks like there’s been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers fell somewhat.
There was a decent 9.1% increase in the price target to US$3.00, with the analysts clearly signalling that the expected reduction in losses is a positive, despite a weaker revenue outlook.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.5% by the end of 2024. This indicates a significant reduction from annual growth of 4.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 11% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining – Streamline Health Solutions is expected to lag the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings are more important to the intrinsic value of the business. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn’t be too quick to come to a conclusion on Streamline Health Solutions. Long-term earnings power is much more important than next year’s profits. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.
Plus, you should also learn about the 4 warning signs we’ve spotted with Streamline Health Solutions (including 1 which is a bit unpleasant) .
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.