CareCloud Stock Faces Uncertain Future Amid Downgraded Forecasts

CareCloud's revenue is expected to decline 4% to $121 million in 2023, with losses per share increasing 26% to $1.32. The company's stock is facing a grim outlook, with a consensus price target plummeting 34% to $6.08.

author-image
Trim Correspondents
New Update
CareCloud Stock Faces Uncertain Future Amid Downgraded Forecasts

CareCloud Stock Faces Uncertain Future Amid Downgraded Forecasts

CareCloud Inc. (NASDAQ: CCLD), a healthcare information technology company, is facing a grim outlook as analysts have significantly revised their forecasts downwards. The consensus estimates for 2023 paint a bleak picture, with revenue expected to decline by 4.0% to $121 million and losses per share increasing by a staggering 26% to $1.32.

Why this matters: The downgraded forecasts for CareCloud's stock have broader implications for the healthcare technology industry, as it may signal a shift in investor confidence. This could lead to a ripple effect, impacting other companies in the sector and potentially influencing the overall market trend.

The downgrade details reveal a lack of confidence in CareCloud's future performance. The consensus price target has plummeted 34% to $6.08, indicating that lower earnings per share are a leading indicator for the company's valuation. The range of analyst price targets is wide, with the most bullish analyst valuing the company at $9.00 and the most bearish at a mere $3.00 per share.

CareCloud's sales are expected to slow significantly, with a forecast annualized revenue decline of 7.8% by the end of 2023. This projection is in stark contrast to the industry's expected growth of 12% per year, further highlighting the company's struggles. The downgrades suggest that "all may not be well at CareCloud," and the market may become increasingly wary of the business.

The company is expected to release its next quarterly earnings announcement on Tuesday, May 14th, 2024. While earnings are expected to grow in the coming year from $0.86 to $0.50 per share, CareCloud's P/E ratio of 0.56 indicates negative earnings, making it difficult to compare to companies with positive earnings.

Four Wall Street research analysts have issued ratings for CareCloud's stock in the last 12 months, with 2 buy ratings and 2 hold ratings. The consensus among analysts is a moderate buy rating. However, considering the mediocre quarter earnings expectations, shorting CareCloud's stock above $3 could be an option for investors. It is not recommended to buy or hold the stock at this time.

CareCloud reported $3.00 EPS for the quarter, missing analysts' consensus estimates of $0.40 by a substantial $2.60. The company had a negative trailing twelve-month return on equity of -60.57% and a negative net margin of -41.58%. While 36.90% of CareCloud's stock is held by insiders, which can be a sign of company health, only 10.16% is held by institutions.

As CareCloud faces a challenging road ahead, the long-term trajectory of the company's earnings is more important than next year's performance. With the stock currently trading at $2.29, having increased by 50.7% since the start of the year, investors should exercise caution and closely monitor the company's financial health and future prospects before making any investment decisions.

Key Takeaways

  • CareCloud's revenue expected to decline 4% to $121M in 2023.
  • Losses per share expected to increase 26% to $1.32 in 2023.
  • Consensus price target plummeted 34% to $6.08, indicating lower earnings.
  • Sales expected to slow, with 7.8% annualized revenue decline by 2023.
  • Investors should exercise caution, monitoring financial health and prospects.