Sarcos Technology and Robotics Corporation (NASDAQ:STRC) Just Reported And Analysts Have Been Cutting Their Estimates

Sarcos Technology and Robotics Corporation (NASDAQ:STRC) just released its latest first-quarter report and things are not looking great. It looks to have been a weak result overall, as sales of US$2.3m were 28% less than the analysts expected. Unsurprisingly, losses were also somewhat larger than was modelled, at US$0.14 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Sarcos Technology and Robotics

Taking into account the latest results, the consensus forecast from Sarcos Technology and Robotics' three analysts is for revenues of US$23.4m in 2023, which would reflect a sizeable 45% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 51% to US$0.51. Before this latest report, the consensus had been expecting revenues of US$26.7m and US$0.48 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.

The consensus price target fell 20% to US$2.75, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Sarcos Technology and Robotics, with the most bullish analyst valuing it at US$4.25 and the most bearish at US$2.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Sarcos Technology and Robotics' revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 64% growth on an annualised basis. This is compared to a historical growth rate of 301% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.9% per year. So it's pretty clear that, while Sarcos Technology and Robotics' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Sarcos Technology and Robotics. They also downgraded their revenue estimates, although industry data suggests that Sarcos Technology and Robotics' revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Sarcos Technology and Robotics' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Sarcos Technology and Robotics. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Sarcos Technology and Robotics analysts - going out to 2025, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Sarcos Technology and Robotics , and understanding them should be part of your investment process.

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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.