Need To Know: This Analyst Just Made A Substantial Cut To Their Coda Octopus Group, Inc. (NASDAQ:CODA) Estimates

Today is shaping up negative for Coda Octopus Group, Inc. (NASDAQ:CODA) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

After this downgrade, Coda Octopus Group's sole analyst is now forecasting revenues of US$22m in 2025. This would be a satisfactory 5.6% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to dip 5.7% to US$0.33 in the same period. Before this latest update, the analyst had been forecasting revenues of US$26m and earnings per share (EPS) of US$0.38 in 2025. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a real cut to earnings per share numbers as well.

View our latest analysis for Coda Octopus Group

The consensus price target fell 20% to US$8.00, with the weaker earnings outlook clearly leading analyst valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Coda Octopus Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 7.5% annualised growth until the end of 2025. If achieved, this would be a much better result than the 2.6% annual decline 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 7.4% annually. So while Coda Octopus Group's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Coda Octopus Group. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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 least one analyst has provided forecasts out to 2026, which can be seen for 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 with high insider ownership.

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