News Flash: 2 Analysts Think Rekor Systems, Inc. (NASDAQ:REKR) Earnings Are Under Threat

The latest analyst coverage could presage a bad day for Rekor Systems, Inc. (NASDAQ:REKR), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the most recent consensus for Rekor Systems from its twin analysts is for revenues of US$64m in 2025 which, if met, would be a sizeable 47% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 65% to US$0.20 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$84m 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.

View our latest analysis for Rekor Systems

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. We can infer from the latest estimates that forecasts expect a continuation of Rekor Systems'historical trends, as the 36% annualised revenue growth to the end of 2025 is roughly in line with the 40% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 12% annually. So it's pretty clear that Rekor Systems is forecast to grow substantially faster than its 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. Given the serious cut to next year's outlook, it's clear that analysts have turned more bearish on Rekor Systems, and we wouldn't blame shareholders for feeling a little more cautious themselves.

That said, the analysts might have good reason to be negative on Rekor Systems, given dilutive stock issuance over the past year. For more information, you can click here to discover this and the 4 other risks we've identified.

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 with high insider ownership.

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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.