Down 20% after announcing preliminary Q1 financial results Monday, newborn medical devices-maker Natus Medical (NASDAQ:NTUS) stock is getting pummeled again in Tuesday trading. The reason isn't hard to guess: Early this morning, not one but two different analysts came out with downgrades, sending Natus Medical shares down another 5%.

The news
Added together, Natus Medical stock, which had been flirting with $40 before earnings came out, now sits just pennies above the $30 level -- a 23% crash from its pre-earnings price. For the most part, this dramatic price drop owes to the numbers that Natus reported yesterday: $87.5 million in Q1 revenue, far below the $96.5 million to $97.5 million previously promised. But that's not the whole story.

Here are three more things you need to know about today's Natus Medical downgrades.

From screening for early indications of ear trouble to detecting infant brain injury -- Natus knows newborns. Image source: Natus Medical.

Thing No. 1: Earnings could go lower, too
At last report, Natus Medical was looking to earn at least pro forma profits of $0.34 to $0.35 per share this fiscal first quarter. With revenue falling roughly 10% short of the company's goal, however, earnings are likely to disappoint as well.

How big a disappointment we should expect, though, won't be revealed until Natus releases its full Q1 earnings report, due out April 20.

Thing No. 2: Wall Street isn't waiting to hear the other shoe drop
Not waiting around for more bad news, two separate stock shops -- Raymond James and Roth Capital -- both ratcheted back expectations for Natus today. As reported by, Raymond James cut Natus Medical stock from outperform to market perform today, and removed its price target on the stock entirely.

Roth, on the other hand, still likes the stock. As reported earlier on, Roth has lowered its price target on the stock to $39 (down from $44 previously), warning investors to be "cautious in the near term." That said, Roth is keeping its buy rating on the shares, and hoping things will turn around in time.

Thing No. 3: Things could get better
According to TheFly's write-up, Roth "still believes the company's core strategic value, emerging service businesses, and margin expansion opportunities." Roth's theory is that while "key orders" have been pushed out into the future, Natus will rebound, recapture those revenues, and rise -- if not to $44 per share, then at least to $39, which would still give new investors a 30% profit on the stock.

And one more thing...
Is Roth right to be optimistic? Let's take a quick look at the numbers, and quality-check Roth's assertion that Natus Medical stock is still a buy despite Monday's bad news.

At last report, Natus Medical was still earning profits at the rate of about $38 million a year, and pegged by analysts on S&P Global Market Intelligence for 18.5% annual long-term earnings growth. That doesn't sound bad. But consider:

Last year, Natus Medical generated positive free cash flow of less than $33 million, which was 14% below its reported net income. Weighed against the stock's post-sell-off valuation of $966 million in market capitalization, that works out to a price-to-free cash flow ratio of 29.5 today.

That would be a rich valuation even if Natus Medical hit Wall Street's goal of 18.5% long-term growth. With revenue starting to fall short, however, growth estimates are likely to roll back as well, making Natus Medical look even more overpriced than it already seems.

So, long story short? Natus Medical stock suffered a big drop today, and a huge decline in price yesterday -- but it's still no bargain. In fact, bad as the news has already been, my very real fear is that Natus Medical stock still has further to fall.