Analyst Forecasts For Electro Optic Systems Holdings Limited (ASX:EOS) Are Surging Higher

Electro Optic Systems Holdings Limited (ASX:EOS) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investor sentiment seems to be improving too, with the share price up 6.9% to AU$0.94 over the past 7 days. Could this big upgrade push the stock even higher?

Following the upgrade, the latest consensus from Electro Optic Systems Holdings' four analysts is for revenues of AU$198m in 2023, which would reflect a huge 25% improvement in sales compared to the last 12 months. Losses are presumed to reduce, shrinking 13% per share from last year to AU$0.30. Yet before this consensus update, the analysts had been forecasting revenues of AU$176m and losses of AU$0.39 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

Check out our latest analysis for Electro Optic Systems Holdings

The consensus price target rose 6.6% to AU$1.34, with the analysts encouraged by the higher revenue and lower forecast losses for this year.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Electro Optic Systems Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 56% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 13% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 11% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Electro Optic Systems Holdings to grow faster than the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Electro Optic Systems Holdings is moving incrementally towards profitability. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Electro Optic Systems Holdings could be worth investigating further.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Electro Optic Systems Holdings 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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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.