The latest analyst coverage could presage a bad day for FiscalNote Holdings, Inc. (NYSE:NOTE), 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 latest downgrade, the five analysts covering FiscalNote Holdings provided consensus estimates of US$127m revenue in 2024, which would reflect a measurable 4.2% decline on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 35% to US$0.57. Yet before this consensus update, the analysts had been forecasting revenues of US$146m and losses of US$0.57 per share in 2024. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to this year's revenue estimates, while at the same time holding losses per share steady.

There was no real change to the consensus price target of US$3.60, suggesting that the revisions to revenue estimates are not expected to have a long-term impact on FiscalNote Holdings' valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 4.2% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 24% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - FiscalNote Holdings is expected to lag the wider industry.

The Bottom Line

Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. 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 FiscalNote Holdings after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple FiscalNote Holdings analysts - going out to 2025, and you can see them 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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