Bearish: Analysts Just Cut Their Telos Corporation (NASDAQ:TLS) Revenue and EPS estimates

Market forces rained on the parade of Telos Corporation (NASDAQ:TLS) shareholders today, when the analysts downgraded their forecasts for next year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the latest downgrade, the current consensus, from the six analysts covering Telos, is for revenues of US$221m in 2023, which would reflect a small 7.7% reduction in Telos' sales over the past 12 months. Per-share losses are expected to explode, reaching US$0.85 per share. However, before this estimates update, the consensus had been expecting revenues of US$257m and US$0.76 per share in losses. 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 Telos

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 6.2% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 18% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Telos is expected to lag the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at Telos. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the serious cut to next year's outlook, it's clear that analysts have turned more bearish on Telos, and we wouldn't blame shareholders for feeling a little more cautious themselves.

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 Telos analysts - going out to 2024, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.