The Consensus EPS Estimates For EDAP TMS S.A. (NASDAQ:EDAP) Just Fell A Lot

One thing we could say about the analysts on EDAP TMS S.A. (NASDAQ:EDAP) - 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.

Following the downgrade, the latest consensus from EDAP TMS' four analysts is for revenues of €53m in 2022, which would reflect a meaningful 18% improvement in sales compared to the last 12 months. After this downgrade, the company is anticipated to report a loss of €0.00044 in 2022, a sharp decline from a profit over the last year. Prior to this update, the analysts had been forecasting revenues of €64m and earnings per share (EPS) of €0.17 in 2022. There looks to have been a major change in sentiment regarding EDAP TMS' prospects, with a measurable cut to revenues and the analysts now forecasting a loss instead of a profit.

See our latest analysis for EDAP TMS

The consensus price target fell 13% to US$11.50, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on EDAP TMS, with the most bullish analyst valuing it at US$13.00 and the most bearish at US$10.00 per share. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting EDAP TMS' growth to accelerate, with the forecast 14% annualised growth to the end of 2022 ranking favourably alongside historical growth of 5.1% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that EDAP TMS is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts are expecting EDAP TMS to become unprofitable 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 EDAP TMS.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple EDAP TMS analysts - going out to 2023, 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.

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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