Electro Optic Systems Holdings Limited (ASX:EOS) Just Reported Half-Yearly Earnings: Have Analysts Changed Their Mind On The Stock?

It's been a sad week for Electro Optic Systems Holdings Limited (ASX:EOS), who've watched their investment drop 11% to AU$1.51 in the week since the company reported its interim result. Revenue greatly exceeded expectations at AU$143m, some 35% ahead of analyst forecasts. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Electro Optic Systems Holdings

Following the recent earnings report, the consensus from seven analysts covering Electro Optic Systems Holdings is for revenues of AU$253.2m in 2024. This implies an uncomfortable 12% decline in revenue compared to the last 12 months. Per-share losses are expected to explode, reaching AU$0.11 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of AU$242.6m and losses of AU$0.11 per share in 2024.

The consensus price target held steady at AU$1.81despite the upgrade to revenue forecasts and ongoing losses. The analysts seems to think the business is otherwise performing roughly in line with expectations. 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. The most optimistic Electro Optic Systems Holdings analyst has a price target of AU$2.80 per share, while the most pessimistic values it at AU$0.79. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 23% by the end of 2024. This indicates a significant reduction from annual growth of 7.9% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.0% annually for the foreseeable future. It's pretty clear that Electro Optic Systems Holdings' revenues are expected to perform substantially worse 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. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at AU$1.81, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Electro Optic Systems Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Electro Optic Systems Holdings analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Electro Optic Systems Holdings .

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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.