Earnings Release: Here's Why Analysts Cut Their Tantalus Systems Holding Inc. (TSE:GRID) Price Target To CA$2.80

Tantalus Systems Holding Inc. (TSE:GRID) came out with its annual results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. The statutory results were not great - while revenues of US$32m were in line with expectations,Tantalus Systems Holding lost US$0.17 a share in the process. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Tantalus Systems Holding after the latest results.

View our latest analysis for Tantalus Systems Holding

Taking into account the latest results, the consensus forecast from Tantalus Systems Holding's five analysts is for revenues of US$39.6m in 2022, which would reflect a huge 23% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 45% to US$0.087. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$39.7m and losses of US$0.083 per share in 2022. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although sales forecasts held steady, the consensus also made a modest increase to its losses per share forecasts.

The consensus price target fell 5.5% to CA$2.80per share, with the analysts clearly concerned by ballooning losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Tantalus Systems Holding, with the most bullish analyst valuing it at CA$3.96 and the most bearish at CA$1.75 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Tantalus Systems Holding is forecast to grow faster in the future than it has in the past, with revenues expected to display 23% annualised growth until the end of 2022. If achieved, this would be a much better result than the 8.8% annual decline over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 12% per year. So it looks like Tantalus Systems Holding is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Tantalus Systems Holding's 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. We have forecasts for Tantalus Systems Holding going out to 2023, and you can see them free on our platform here.

Even so, be aware that Tantalus Systems Holding is showing 4 warning signs 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.