Analyst Estimates: Here's What Brokers Think Of SoundThinking, Inc. (NASDAQ:SSTI) After Its First-Quarter Report

SoundThinking, Inc. (NASDAQ:SSTI) just released its latest quarterly results and things are looking bullish. Results overall were solid, with revenues arriving 5.3% better than analyst forecasts at US$28m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.12 per share, were 5.3% smaller than the analysts expected. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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After the latest results, the seven analysts covering SoundThinking are now predicting revenues of US$111.4m in 2025. If met, this would reflect a credible 6.2% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 61% to US$0.24. Before this earnings announcement, the analysts had been modelling revenues of US$111.5m and losses of US$0.13 per share in 2025. While this year's revenue estimates held steady, there was also a sizeable expansion in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

See our latest analysis for SoundThinking

The consensus price target held steady at US$22.17, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. 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. Currently, the most bullish analyst values SoundThinking at US$30.00 per share, while the most bearish prices it at US$19.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. It's pretty clear that there is an expectation that SoundThinking's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 8.3% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 13% annually. Factoring in the forecast slowdown in growth, it seems obvious that SoundThinking is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at SoundThinking. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that SoundThinking's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for SoundThinking going out to 2026, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for SoundThinking that you should be aware of.

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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.