Frequency Electronics, Inc. Just Missed Earnings - But Analysts Have Updated Their Models

As you might know, Frequency Electronics, Inc. (NASDAQ:FEIM) last week released its latest quarterly, and things did not turn out so great for shareholders. Unfortunately, Frequency Electronics delivered a serious earnings miss. Revenues of US$14m were 16% below expectations, and statutory earnings per share of US$0.07 missed estimates by 78%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Taking into account the latest results, Frequency Electronics' two analysts currently expect revenues in 2026 to be US$68.3m, approximately in line with the last 12 months. Statutory earnings per share are expected to plunge 56% to US$0.98 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$77.1m and earnings per share (EPS) of US$1.53 in 2026. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a pretty serious reduction to earnings per share numbers as well.

See our latest analysis for Frequency Electronics

What's most unexpected is that the consensus price target rose 12% to US$38.00, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 0.5% annualised decline to the end of 2026. That is a notable change from historical growth of 6.9% 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 8.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Frequency Electronics is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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 analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Frequency Electronics going out as far as 2028, and you can see them free on our platform here.

Even so, be aware that Frequency Electronics is showing 2 warning signs in our investment analysis , and 1 of those can't be ignored...

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.