Today is shaping up negative for Hanger, Inc. (NYSE:HNGR) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from twin analysts covering Hanger is for revenues of US$1.0b in 2020, implying a small 6.4% decline in sales compared to the last 12 months. After this downgrade, the company is anticipated to report a loss of US$0.36 in 2020, a sharp decline from a profit over the last year. Before this latest update, the analysts had been forecasting revenues of US$1.1b and earnings per share (EPS) of US$0.85 in 2020. So we can see that the consensus has become notably more bearish on Hanger's outlook with these numbers, making a substantial drop in this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

View our latest analysis for Hanger

The consensus price target fell 21% to US$22.00, implicitly signalling that lower earnings per share are a leading indicator for Hanger's valuation. 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. The most optimistic Hanger analyst has a price target of US$24.00 per share, while the most pessimistic values it at US$20.00. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

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 sales are expected to reverse, with the forecast 6.4% revenue decline a notable change from historical growth of 0.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.6% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Hanger is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts are expecting Hanger to become unprofitable this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Hanger's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Hanger.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Hanger going out as far as 2021, 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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