Earnings Update: Lantronix, Inc. (NASDAQ:LTRX) Just Reported And Analysts Are Trimming Their Forecasts

It's been a mediocre week for Lantronix, Inc. (NASDAQ:LTRX) shareholders, with the stock dropping 19% to US$3.18 in the week since its latest second-quarter results. Lantronix reported revenues of US$31m, in line with expectations, but it unfortunately also reported (statutory) losses of US$0.06 per share, which were slightly larger than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Lantronix

Taking into account the latest results, the five analysts covering Lantronix provided consensus estimates of US$124.8m revenue in 2025, which would reflect an uncomfortable 20% decline over the past 12 months. Losses are forecast to balloon 72% to US$0.22 per share. Before this latest report, the consensus had been expecting revenues of US$136.1m and US$0.075 per share in losses. So it's pretty clear the analysts have mixed opinions on Lantronix after this update; revenues were downgraded and per-share losses expected to increase.

The average price target was broadly unchanged at US$5.60, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Lantronix, with the most bullish analyst valuing it at US$8.00 and the most bearish at US$4.50 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 36% by the end of 2025. This indicates a significant reduction from annual growth of 22% 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 8.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Lantronix is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. 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. The consensus price target held steady at US$5.60, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Lantronix. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Lantronix analysts - going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Lantronix .

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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.