CA$11.34: That's What Analysts Think Coveo Solutions Inc. (TSE:CVO) Is Worth After Its Latest Results

Shareholders might have noticed that Coveo Solutions Inc. (TSE:CVO) filed its yearly result this time last week. The early response was not positive, with shares down 2.1% to CA$7.64 in the past week. The results look positive overall; while revenues of US$126m were in line with analyst predictions, statutory losses were 5.0% smaller than expected, with Coveo Solutions losing US$0.23 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Coveo Solutions

Taking into account the latest results, the consensus forecast from Coveo Solutions' ten analysts is for revenues of US$135.9m in 2025. This reflects a credible 7.8% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 28% to US$0.17. Before this latest report, the consensus had been expecting revenues of US$146.5m and US$0.21 per share in losses. Although the revenue estimates have fallen somewhat, Coveo Solutions'future looks a little different to the past, with a favorable reduction in the loss per share forecasts in particular.

The analysts have cut their price target 18% to CA$11.34per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. 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. There are some variant perceptions on Coveo Solutions, with the most bullish analyst valuing it at CA$13.57 and the most bearish at CA$8.01 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. We would highlight that Coveo Solutions' revenue growth is expected to slow, with the forecast 7.8% annualised growth rate until the end of 2025 being well below the historical 20% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 17% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Coveo Solutions.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Coveo Solutions' future valuation.

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 Simply Wall St, we have a full range of analyst estimates for Coveo Solutions going out to 2027, and you can see them free on our platform here..

Even so, be aware that Coveo Solutions is showing 1 warning sign in our investment analysis , you should know about...

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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.