Earnings Release: Here's Why Analysts Cut Their Kopin Corporation (NASDAQ:KOPN) Price Target To US$2.63

Investors in Kopin Corporation (NASDAQ:KOPN) had a good week, as its shares rose 4.3% to close at US$0.85 following the release of its second-quarter results. Revenues came in 24% better than analyst models expected, at US$12m, although statutory losses ballooned 25% to US$0.05, which is much worse than what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Kopin

Taking into account the latest results, the most recent consensus for Kopin from four analysts is for revenues of US$48.3m in 2024. If met, it would imply a solid 16% increase on its revenue over the past 12 months. The loss per share is expected to ameliorate slightly, reducing to US$0.38. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$45.4m and losses of US$0.30 per share in 2024. So it's pretty clear the analysts have mixed opinions on Kopin even after this update; although they upped their revenue numbers, it came at the cost of a considerable increase to per-share losses.

It will come as no surprise that expanding losses caused the consensus price target to fall 13% to US$2.63with the analysts implicitly ranking ongoing losses as a greater concern than growing revenues. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Kopin analyst has a price target of US$3.00 per share, while the most pessimistic values it at US$2.50. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company 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 Kopin's growth to accelerate, with the forecast 35% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.6% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Kopin to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting them 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 Kopin's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Kopin analysts - going out to 2025, and you can see them free on our platform here.

Plus, you should also learn about the 5 warning signs we've spotted with Kopin (including 1 which is concerning) .

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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.