Some CalAmp Corp. (NASDAQ:CAMP) Analysts Just Made A Major Cut To Next Year's Estimates

One thing we could say about the analysts on CalAmp Corp. (NASDAQ:CAMP) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. 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 latest consensus from CalAmp's six analysts is for revenues of US$317m in 2023, which would reflect a satisfactory 2.6% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$0.87 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$353m and losses of US$0.41 per share in 2023. 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.

Check out our latest analysis for CalAmp

The consensus price target fell 9.8% to US$13.00, implicitly signalling that lower earnings per share are a leading indicator for CalAmp's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values CalAmp at US$16.00 per share, while the most bearish prices it at US$10.00. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that CalAmp's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 2.1% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 3.7% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.8% annually for the foreseeable future. Although CalAmp's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

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 CalAmp going out to 2024, and you can see them 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 that insiders are buying.

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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.