News Flash: 5 Analysts Think Eos Energy Enterprises, Inc. (NASDAQ:EOSE) Earnings Are Under Threat

One thing we could say about the analysts on Eos Energy Enterprises, Inc. (NASDAQ:EOSE) - 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) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the five analysts covering Eos Energy Enterprises are now predicting revenues of US$241m in 2025. If met, this would reflect a major improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 85% to US$0.36. Yet before this consensus update, the analysts had been forecasting revenues of US$304m and losses of US$0.29 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for Eos Energy Enterprises

There was no major change to the consensus price target of US$4.07, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Eos Energy Enterprises' rate of growth is expected to accelerate meaningfully, with the forecast 8x annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 50% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Eos Energy Enterprises is expected to grow much faster than its industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at Eos Energy Enterprises. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected next year, we wouldn't be surprised if investors were a bit wary of Eos Energy Enterprises.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Eos Energy Enterprises, including a short cash runway. Learn more, and discover the 1 other risk we've identified, for 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.