Downgrade: Here's How Analysts See Rekor Systems, Inc. (NASDAQ:REKR) Performing In The Near Term

Today is shaping up negative for Rekor Systems, Inc. (NASDAQ:REKR) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. 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 most recent consensus for Rekor Systems from its dual analysts is for revenues of US$56m in 2024 which, if met, would be a substantial 45% increase on its sales over the past 12 months. Losses are expected to be contained, narrowing 13% per share from last year to US$0.53 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$66m and losses of US$0.29 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

See our latest analysis for Rekor Systems

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 Rekor Systems' growth to accelerate, with the forecast 64% annualised growth to the end of 2024 ranking favourably alongside historical growth of 33% 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 13% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Rekor Systems to grow faster than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Rekor Systems. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Rekor Systems, and their negativity could be grounds for caution.

There might be good reason for analyst bearishness towards Rekor Systems, like dilutive stock issuance over the past year. Learn more, and discover the 3 other warning signs we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.