Analysts Have Lowered Expectations For RF Industries, Ltd. (NASDAQ:RFIL) After Its Latest Results

As you might know, RF Industries, Ltd. (NASDAQ:RFIL) recently reported its quarterly numbers. Despite revenues of US$13m falling 7.1% short of expectations, statutory losses of US$0.13 per share were well contained, and in line with analyst models. Following the result, the analyst has updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.

View our latest analysis for RF Industries

Taking into account the latest results, RF Industries' solitary analyst currently expect revenues in 2024 to be US$68.0m, approximately in line with the last 12 months. Losses are forecast to narrow 7.1% to US$0.29 per share. Before this latest report, the consensus had been expecting revenues of US$73.8m and US$0.12 per share in losses. While this year's revenue estimates dropped there was also a very substantial increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The consensus price target fell 5.9% to US$4.00, with the analyst clearly concerned about the company following the weaker revenue and earnings outlook.

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. It's pretty clear that there is an expectation that RF Industries' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.5% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that RF Industries is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at RF Industries. 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 fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of RF Industries' future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for RF Industries going out as far as 2025, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with RF Industries , and understanding it should be part of your investment process.

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.