Shareholders might have noticed that DarioHealth Corp. (NASDAQ:DRIO) filed its second-quarter result this time last week. The early response was not positive, with shares down 5.4% to US$7.33 in the past week. Results look to have been somewhat negative - revenue fell 8.5% short of analyst estimates at US$5.2m, although statutory losses were somewhat better. The per-share loss was US$0.85, 30% smaller than the analysts were expecting prior to the result. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Taking into account the latest results, the consensus forecast from DarioHealth's four analysts is for revenues of US$21.7m in 2026. This reflects a modest 3.1% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 30% to US$2.94. Before this latest report, the consensus had been expecting revenues of US$26.0m and US$3.96 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also reducing the estimated losses the business will incur.

The consensus price target was broadly unchanged at US$14.50, implying that the business is performing roughly in line with expectations, despite adjustments to both revenue and earnings estimates. 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 DarioHealth at US$28.00 per share, while the most bearish prices it at US$8.00. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the DarioHealth's past performance and to peers in the same industry. It's clear from the latest estimates that DarioHealth's rate of growth is expected to accelerate meaningfully, with the forecast 6.4% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 2.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 10% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, DarioHealth is expected to grow slower than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. With that said, earnings are more important to the long-term value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for DarioHealth going out to 2028, and you can see them free on our platform here.

You still need to take note of risks, for example - DarioHealth has 3 warning signs (and 1 which is concerning) we think you should know about.

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.