Seeing Machines Limited (LON:SEE) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

Seeing Machines Limited (LON:SEE) shareholders are probably feeling a little disappointed, since its shares fell 8.2% to UK£0.11 in the week after its latest annual results. It was a pretty bad result overall; while revenues were in line with expectations at AU$47m, statutory losses exploded to AU$0.01 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Seeing Machines

Taking into account the latest results, the current consensus from Seeing Machines' three analysts is for revenues of AU$54.5m in 2022, which would reflect a decent 16% increase on its sales over the past 12 months. Per-share losses are supposed to see a sharp uptick, reaching AU$0.0046. Before this latest report, the consensus had been expecting revenues of AU$59.3m and AU$0.0045 per share in losses. So it's pretty clear consensus is more negative on Seeing Machines after the new consensus numbers; while the analysts trimmed their revenue estimates, they also administered a pronounced increase to per-share loss expectations.

The average price target was broadly unchanged at UK£0.16, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Seeing Machines at UK£0.17 per share, while the most bearish prices it at UK£0.15. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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 period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 16% growth on an annualised basis. That is in line with its 18% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 7.1% per year. So although Seeing Machines is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Seeing Machines. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Seeing Machines. Long-term earnings power is much more important than next year's profits. We have forecasts for Seeing Machines going out to 2023, and you can see them free on our platform here.

Even so, be aware that Seeing Machines is showing 2 warning signs in our investment analysis , you should know about...

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.

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