Downgrade: Here's How Analysts See Greenidge Generation Holdings Inc. (NASDAQ:GREE) Performing In The Near Term

The analysts covering Greenidge Generation Holdings Inc. (NASDAQ:GREE) 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) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the latest consensus from Greenidge Generation Holdings' dual analysts is for revenues of US$159m in 2022, which would reflect a meaningful 19% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 69% to US$0.35. Previously, the analysts had been modelling revenues of US$211m and earnings per share (EPS) of US$0.46 in 2022. So we can see that the consensus has become notably more bearish on Greenidge Generation Holdings' outlook with these numbers, making a pretty serious reduction to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

Check out our latest analysis for Greenidge Generation Holdings

The consensus price target fell 49% to US$7.75, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Greenidge Generation Holdings at US$10.00 per share, while the most bearish prices it at US$5.50. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Greenidge Generation Holdings' revenue growth is expected to slow, with the forecast 26% annualised growth rate until the end of 2022 being well below the historical 378% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% annually. Even after the forecast slowdown in growth, it seems obvious that Greenidge Generation Holdings is also expected to grow faster than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Greenidge Generation Holdings dropped from profits to a loss this year. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Greenidge Generation Holdings going out as far as 2024, 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.