Analysts Have Lowered Expectations For Comtech Telecommunications Corp. (NASDAQ:CMTL) After Its Latest Results

There's been a major selloff in Comtech Telecommunications Corp. (NASDAQ:CMTL) shares in the week since it released its quarterly report, with the stock down 30% to US$2.99. Revenues of US$106m came in 3.8% below estimates, but statutory losses were well contained with a per-share loss of US$0.47 being some 13% smaller than what the analyst was predicting. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.

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Following the recent earnings report, the consensus from sole analyst covering Comtech Telecommunications is for revenues of US$314.6m in 2027. This implies a painful 31% decline in revenue compared to the last 12 months. Losses are forecast to narrow 2.3% to US$2.16 per share. Yet prior to the latest earnings, the analyst had been forecasting revenues of US$461.6m and losses of US$1.99 per share in 2027. So there's been quite a change-up of views after the recent consensus updates, withthe analyst making a serious cut to their revenue outlook while also expecting losses per share to increase.

View our latest analysis for Comtech Telecommunications

The average price target lifted 20% to US$6.00, clearly signalling that the weaker revenue and EPS outlook are not expected to weigh on the stock over the longer term.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Comtech Telecommunications' past performance and to peers in the same industry. One more thing stood out to us about these estimates, and it's the idea that Comtech Telecommunications' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 25% to the end of 2027. This tops off a historical decline of 2.8% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 15% per year. So while a broad number of companies are forecast to grow, unfortunately Comtech Telecommunications is expected to see its revenue affected worse than other companies in the industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Comtech Telecommunications. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2028, which can be seen for free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Comtech Telecommunications (1 can't be ignored!) that you need to be mindful 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.