Bearish: Analysts Just Cut Their Seeing Machines Limited (LON:SEE) Revenue and EPS estimates

One thing we could say about the analysts on Seeing Machines Limited (LON:SEE) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business. Bidders are definitely seeing a different story, with the stock price of UK£0.028 reflecting a 10% rise in the past week. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.

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Following the downgrade, the current consensus from Seeing Machines' dual analysts is for revenues of US$81m in 2026 which - if met - would reflect a huge 30% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 70% to US$0.0016. Prior to this update, the analysts had been forecasting revenues of US$96m and earnings per share (EPS) of US$0.003 in 2026. There looks to have been a major change in sentiment regarding Seeing Machines' prospects, with a substantial drop in revenues and the analysts now forecasting a loss instead of a profit.

View our latest analysis for Seeing Machines

The consensus price target was broadly unchanged at AU$0.13, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. 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. The most optimistic Seeing Machines analyst has a price target of AU$0.20 per share, while the most pessimistic values it at AU$0.063. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Seeing Machines' rate of growth is expected to accelerate meaningfully, with the forecast 30% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 18% p.a. 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 6.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Seeing Machines to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts are expecting Seeing Machines to become unprofitable this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Seeing Machines after the downgrade.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Seeing Machines going out as far as 2028, and you can see them free on our platform here.

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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.