Today is shaping up negative for DocGo Inc. (NASDAQ:DCGO) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the current consensus, from the seven analysts covering DocGo, is for revenues of US$638m in 2024, which would reflect a chunky 9.3% reduction in DocGo's sales over the past 12 months. Statutory earnings per share are presumed to shoot up 58% to US$0.34. Prior to this update, the analysts had been forecasting revenues of US$714m and earnings per share (EPS) of US$0.35 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a substantial drop in revenue estimates and a minor downgrade to EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 22% to د.إ27.55. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic DocGo analyst has a price target of د.إ40.40 per share, while the most pessimistic values it at د.إ18.36. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 12% by the end of 2024. This indicates a significant reduction from annual growth of 40% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.7% per year. It's pretty clear that DocGo'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 cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of DocGo's future valuation. 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 DocGo after today.

That said, the analysts might have good reason to be negative on DocGo, given its declining profit margins. For more information, you can click here to discover this and the 1 other concern 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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