Orion Energy Systems, Inc. (NASDAQ:OESX) Just Reported, And Analysts Assigned A US$2.50 Price Target

Orion Energy Systems, Inc. (NASDAQ:OESX) missed earnings with its latest second-quarter results, disappointing overly-optimistic forecasters. Earnings fell badly short of analyst estimates, with US$19m revenue falling -11% short, and statutory losses of US$0.11 per share being -16% greater than forecast. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Orion Energy Systems

Taking into account the latest results, the consensus forecast from Orion Energy Systems' twin analysts is for revenues of US$97.8m in 2025. This reflects a satisfactory 6.7% improvement in revenue compared to the last 12 months. Per-share losses are predicted to creep up to US$0.26. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$101.4m and losses of US$0.26 per share in 2025.

The average price target fell 44% to US$2.50, with the analysts clearly concerned about the weaker revenue outlook and expectation of ongoing losses.

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. For example, we noticed that Orion Energy Systems' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 14% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 11% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 8.5% per year. Not only are Orion Energy Systems' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also downgraded Orion Energy Systems' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Orion Energy Systems that you should be aware of.

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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.