Yahoo Finance The Consensus EPS Estimates For Applied Digital Corporation (NASDAQ:APLD) Just Fell A Lot
Market forces rained on the parade of Applied Digital Corporation (NASDAQ:APLD) shareholders today, when the analysts downgraded their forecasts for next year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
Following the downgrade, the current consensus from Applied Digital's six analysts is for revenues of US$307m in 2025 which - if met - would reflect a major 113% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 35% to US$0.48. Previously, the analysts had been modelling revenues of US$589m and earnings per share (EPS) of US$0.58 in 2025. So we can see that the consensus has become notably more bearish on Applied Digital's outlook with these numbers, making a pretty serious reduction to next year's revenue estimates. Furthermore, they expect the business to be loss-making next year, compared to their previous forecasts of a profit.
View our latest analysis for Applied Digital
The consensus price target fell 35% to US$8.71, implicitly signalling that lower earnings per share are a leading indicator for Applied Digital's valuation.
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. We would highlight that Applied Digital's revenue growth is expected to slow, with the forecast 83% annualised growth rate until the end of 2025 being well below the historical 122% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.2% annually. So it's pretty clear that, while Applied Digital's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away is that analysts are expecting Applied Digital to become unprofitable next year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Applied Digital.
Still, 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 Applied Digital going out to 2026, and you can see them free on our platform here.
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.
