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CA$2.59: That's What Analysts Think CloudMD Software & Services Inc. (CVE:DOC) Is Worth After Its Latest Results

It's been a mediocre week for CloudMD Software & Services Inc. (CVE:DOC) shareholders, with the stock dropping 13% to CA$0.49 in the week since its latest full-year results. Revenues were in line with expectations, at CA$102m, while statutory losses ballooned to CA$0.15 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for CloudMD Software & Services

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After the latest results, the six analysts covering CloudMD Software & Services are now predicting revenues of CA$187.8m in 2022. If met, this would reflect a major 84% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 22% to CA$0.08. Before this earnings announcement, the analysts had been modelling revenues of CA$190.9m and losses of CA$0.06 per share in 2022. So it's pretty clear the analysts have mixed opinions on CloudMD Software & Services even after this update; although they reconfirmed their revenue numbers, it came at the cost of a sizeable expansion in per-share losses.

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With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 18% to CA$2.59, with the analysts signalling that growing losses would be a definite concern. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on CloudMD Software & Services, with the most bullish analyst valuing it at CA$5.00 and the most bearish at CA$2.00 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 84% growth on an annualised basis. That is in line with its 86% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 14% annually. So it's pretty clear that CloudMD Software & Services is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of CloudMD Software & Services' future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for CloudMD Software & Services going out to 2024, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 3 warning signs for CloudMD Software & Services that you need to be mindful of.

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.