Frequency Electronics, Inc. Just Reported A Surprise Loss: Here's What Analysts Think Will Happen Next

The investors in Frequency Electronics, Inc.'s (NASDAQ:FEIM) will be rubbing their hands together with glee today, after the share price leapt 35% to US$79.85 in the week following its annual results. It was a pretty negative result overall, with revenues of US$63m missing analyst predictions by 4.8%. Worse, the business reported a statutory loss of US$0.09 per share, a substantial decline on analyst expectations of a profit. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the most recent consensus for Frequency Electronics from dual analysts is for revenues of US$79.7m in 2027. If met, it would imply a sizeable 26% increase on its revenue over the past 12 months. Frequency Electronics is also expected to turn profitable, with statutory earnings of US$1.07 per share. In the lead-up to this report, the analysts had been modelling revenues of US$80.9m and earnings per share (EPS) of US$1.04 in 2027. So the consensus seems to have become somewhat more optimistic on Frequency Electronics' earnings potential following these results.

View our latest analysis for Frequency Electronics

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 8.0% to US$81.00.

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. The analysts are definitely expecting Frequency Electronics' growth to accelerate, with the forecast 26% annualised growth to the end of 2027 ranking favourably alongside historical growth of 8.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Frequency Electronics is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Frequency Electronics following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 2029, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Frequency Electronics 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.