The analysts covering Nogin, Inc. (NASDAQ:NOGN) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. 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 Nogin’s three analysts is for revenues of US$54m in 2023, which would reflect a disturbing 31% decline in sales compared to the last year of performance. Losses are predicted to fall substantially, shrinking 25% to US$3.64 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$70m and losses of US$3.20 per share in 2023. 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.
See our latest analysis for Nogin
The consensus price target fell 55% to US$2.50, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.
Of course, another way to look at these forecasts is to place them into context against the industry itself. Over the past year, revenues have declined around 34% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 53% decline in revenue until the end of 2023. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 11% annually. So while a broad number of companies are forecast to grow, unfortunately Nogin is expected to see its sales affected worse than other companies in the 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 Nogin.
There might be good reason for analyst bearishness towards Nogin, like major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 1 other risk we’ve identified.
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.
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