Coveo Solutions Inc. (TSE:CVO) Analysts Are Pretty Bullish On The Stock After Recent Results

There's been a notable change in appetite for Coveo Solutions Inc. (TSE:CVO) shares in the week since its third-quarter report, with the stock down 13% to CA$8.08. Revenues of US$28m were in line with expectations, although statutory losses per share were US$0.10, some 12% smaller than was expected. 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.

View our latest analysis for Coveo Solutions

Taking into account the latest results, the current consensus from Coveo Solutions' eight analysts is for revenues of US$132.3m in 2024, which would reflect a major 22% increase on its sales over the past 12 months. Losses are expected to be contained, narrowing 11% from last year to US$0.44. Before this earnings announcement, the analysts had been modelling revenues of US$133.5m and losses of US$0.47 per share in 2024. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for next year.

The average price target rose 16% to CA$11.07, with the analysts signalling that the forecast reduction in losses would be a positive for the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Coveo Solutions analyst has a price target of CA$13.00 per share, while the most pessimistic values it at CA$10.01. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Coveo Solutions' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Coveo Solutions' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 17% growth on an annualised basis. This is compared to a historical growth rate of 25% over the past three years. Compare this to the 107 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 14% per year. So it's pretty clear that, while Coveo Solutions' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Coveo Solutions. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Coveo Solutions going out to 2025, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for Coveo Solutions 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.