The Consensus EPS Estimates For Orion Energy Systems, Inc. (NASDAQ:OESX) Just Fell Dramatically

One thing we could say about the analysts on Orion Energy Systems, Inc. (NASDAQ:OESX) - 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 the analysts have soured majorly on the business.

After this downgrade, Orion Energy Systems' dual analysts are now forecasting revenues of US$105m in 2025. This would be a sizeable 22% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 42% to US$0.33 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$127m and losses of US$0.17 per share in 2025. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

See our latest analysis for Orion Energy Systems

The consensus price target fell 44% to US$2.50, implicitly signalling that lower earnings per share are a leading indicator for Orion Energy Systems' valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Orion Energy Systems is forecast to grow faster in the future than it has in the past, with revenues expected to display 17% annualised growth until the end of 2025. If achieved, this would be a much better result than the 3.4% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.0% annually. 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 important thing to take away is that analysts increased their loss per share estimates for next year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Orion Energy Systems.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Orion Energy Systems going out as far as 2026, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.