The latest analyst coverage could presage a bad day for Cutera, Inc. (NASDAQ:CUTR), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.
Following the downgrade, the consensus from four analysts covering Cutera is for revenues of US$173m in 2024, implying a concerning 25% decline in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 42% to US$3.29 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$195m and losses of US$2.85 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cutera's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 20% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 11% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.9% annually for the foreseeable future. It's pretty clear that Cutera's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next 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 serious cut to next year's outlook, it's clear that analysts have turned more bearish on Cutera, and we wouldn't blame shareholders for feeling a little more cautious themselves.
There might be good reason for analyst bearishness towards Cutera, like a short cash runway. For more information, you can click here to discover this and the 2 other concerns 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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