Results: Electro Optic Systems Holdings Limited Delivered A Surprise Loss And Now Analysts Have New Forecasts

Investors in Electro Optic Systems Holdings Limited (ASX:EOS) had a good week, as its shares rose 4.8% to close at AU$5.29 following the release of its full-year results. It looks like a pretty bad result, given that revenues fell 10% short of analyst estimates at AU$189m, and the company reported a statutory loss of AU$0.20 per share instead of the profit that the analysts had been forecasting. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Electro Optic Systems Holdings

After the latest results, the dual analysts covering Electro Optic Systems Holdings are now predicting revenues of AU$327.6m in 2021. If met, this would reflect a sizeable 74% improvement in sales compared to the last 12 months. Electro Optic Systems Holdings is also expected to turn profitable, with statutory earnings of AU$0.25 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$327.6m and earnings per share (EPS) of AU$0.22 in 2021. Although the revenue estimates have not really changed, we can see there's been a solid gain to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

There's been no major changes to the consensus price target of AU$7.44, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation.

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. The analysts are definitely expecting Electro Optic Systems Holdings' growth to accelerate, with the forecast 74% growth ranking favourably alongside historical growth of 46% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.8% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Electro Optic Systems Holdings is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Electro Optic Systems Holdings following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at AU$7.44, with the latest estimates not enough to have an impact on their price targets.

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. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

Before you take the next step you should know about the 2 warning signs for Electro Optic Systems Holdings that we have uncovered.

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This article by Simply Wall St is general in nature. 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.
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