Electrovaya Inc. (TSE:ELVA) Analysts Are Reducing Their Forecasts For Next Year

The latest analyst coverage could presage a bad day for Electrovaya Inc. (TSE:ELVA), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the current consensus from Electrovaya's four analysts is for revenues of US$94m in 2025 which - if met - would reflect a major 89% increase on its sales over the past 12 months. Per-share earnings are expected to soar 3,767% to US$0.41. Before this latest update, the analysts had been forecasting revenues of US$115m and earnings per share (EPS) of US$0.52 in 2025. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for Electrovaya

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 Electrovaya's growth to accelerate, with the forecast 67% annualised growth to the end of 2025 ranking favourably alongside historical growth of 44% 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 25% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Electrovaya to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Electrovaya. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Electrovaya, and their negativity could be grounds for caution.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Electrovaya's financials, such as recent substantial insider selling. For more information, you can click here to discover this and the 3 other warning signs we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.