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The DarioHealth Corp. (NASDAQ:DRIO) Annual Results Are Out And Analysts Have Published New Forecasts

There's been a notable change in appetite for DarioHealth Corp. (NASDAQ:DRIO) shares in the week since its yearly report, with the stock down 16% to US$4.00. It was a respectable set of results; while revenues of US$28m were in line with analyst predictions, statutory losses were 13% smaller than expected, with DarioHealth losing US$2.54 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for DarioHealth

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earnings-and-revenue-growth

Following the latest results, DarioHealth's five analysts are now forecasting revenues of US$32.8m in 2023. This would be a notable 19% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 20% from last year to US$1.85. Before this earnings announcement, the analysts had been modelling revenues of US$33.4m and losses of US$2.20 per share in 2023. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading revenues and making a favorable reduction in losses per share in particular.

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There's been no major changes to the consensus price target of US$11.70, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. 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 DarioHealth, with the most bullish analyst valuing it at US$14.00 and the most bearish at US$7.50 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that DarioHealth's revenue growth is expected to slow, with the forecast 19% annualised growth rate until the end of 2023 being well below the historical 36% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.5% per year. So it's pretty clear that, while DarioHealth's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss 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 held steady at US$11.70, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for DarioHealth going out to 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - DarioHealth has 3 warning signs we think you should be aware 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.

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