Earnings Release: Here's Why Analysts Cut Their Boxlight Corporation (NASDAQ:BOXL) Price Target To US$2.50

A week ago, Boxlight Corporation (NASDAQ:BOXL) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. Revenues beat expectations coming in atUS$37m, ahead of estimates by 9.0%. Statutory losses were somewhat smaller thanthe analysts expected, coming in at US$0.76 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Boxlight

Taking into account the latest results, Boxlight's three analysts currently expect revenues in 2024 to be US$175.6m, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 70% to US$1.36. Before this latest report, the consensus had been expecting revenues of US$173.8m and US$1.46 per share in losses. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.

Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 35% to US$2.50. It looks likethe analysts have become less optimistic about the overall business. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Boxlight analyst has a price target of US$3.00 per share, while the most pessimistic values it at US$2.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 Boxlight's revenue growth is expected to slow, with the forecast 2.3% annualised growth rate until the end of 2024 being well below the historical 35% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.0% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Boxlight.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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 Boxlight's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Boxlight. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Boxlight analysts - going out to 2025, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Boxlight (1 is a bit unpleasant) 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.