Yahoo Finance Things Look Grim For Starry Group Holdings, Inc. (NYSE:STRY) After Today's Downgrade
The analysts covering Starry Group Holdings, Inc. (NYSE:STRY) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the downgrade, the latest consensus from Starry Group Holdings' four analysts is for revenues of US$42m in 2022, which would reflect a huge 50% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$1.48 per share. However, before this estimates update, the consensus had been expecting revenues of US$51m and US$1.15 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.
See our latest analysis for Starry Group Holdings
The consensus price target fell 25% to US$6.88, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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. Currently, the most bullish analyst values Starry Group Holdings at US$9.50 per share, while the most bearish prices it at US$4.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Starry Group Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 125% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 64% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 1.6% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Starry Group Holdings is expected to grow much faster than its 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 Starry Group Holdings. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Starry Group Holdings.
After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Starry Group Holdings' business, like a short cash runway. Learn more, and discover the 1 other concern 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 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.
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