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Revenue Downgrade: Here's What Analysts Forecast For Augmedix, Inc. (NASDAQ:AUGX)

The latest analyst coverage could presage a bad day for Augmedix, Inc. (NASDAQ:AUGX), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the current consensus from Augmedix's six analysts is for revenues of US$53m in 2024 which - if met - would reflect a solid 9.2% increase on its sales over the past 12 months. Losses are supposed to balloon 31% to US$0.55 per share. However, before this estimates update, the consensus had been expecting revenues of US$61m and US$0.52 per share in losses. 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.

See our latest analysis for Augmedix

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earnings-and-revenue-growth

The consensus price target fell 45% to US$3.33, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

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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. It's pretty clear that there is an expectation that Augmedix's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 13% growth on an annualised basis. This is compared to a historical growth rate of 34% over the past three years. Compare this to the 69 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 10% per year. Factoring in the forecast slowdown in growth, it looks like Augmedix is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Augmedix. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Augmedix after today.

There might be good reason for analyst bearishness towards Augmedix, like dilutive stock issuance over the past year. Learn more, and discover the 3 other flags we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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.