Electro Optic Systems Holdings Limited (ASX:EOS) Just Reported And Analysts Have Been Lifting Their Price Targets

Investors in Electro Optic Systems Holdings Limited (ASX:EOS) had a good week, as its shares rose 9.7% to close at AU$1.81 following the release of its full-year results. Revenues of AU$222m arrived in line with expectations, although statutory losses per share were AU$0.21, an impressive 26% smaller than what broker models predicted. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Electro Optic Systems Holdings

Taking into account the latest results, the current consensus from Electro Optic Systems Holdings' four analysts is for revenues of AU$252.9m in 2024. This would reflect a decent 14% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 50% to AU$0.097. Before this latest report, the consensus had been expecting revenues of AU$250.1m and AU$0.15 per share in losses. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a very promising decrease in losses per share in particular.

The average price target rose 30% to AU$1.88, with the analysts signalling that the forecast reduction in losses would be a positive for the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Electro Optic Systems Holdings at AU$2.30 per share, while the most bearish prices it at AU$1.39. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Electro Optic Systems Holdings' growth to accelerate, with the forecast 14% annualised growth to the end of 2024 ranking favourably alongside historical growth of 8.4% per annum 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 9.5% 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 most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 estimates - from multiple Electro Optic Systems Holdings analysts - going out to 2026, and you can see them free on our platform here.

You can also see our analysis of Electro Optic Systems Holdings' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.