Analysts Have Been Trimming Their Sono-Tek Corporation (NASDAQ:SOTK) Price Target After Its Latest Report

Shareholders might have noticed that Sono-Tek Corporation (NASDAQ:SOTK) filed its third-quarter result this time last week. The early response was not positive, with shares down 4.5% to US$3.91 in the past week. It was a credible result overall, with revenues of US$5.2m and statutory earnings per share of US$0.02 both in line with analyst estimates, showing that Sono-Tek is executing in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sono-Tek after the latest results.

View our latest analysis for Sono-Tek

Taking into account the latest results, the most recent consensus for Sono-Tek from twin analysts is for revenues of US$22.4m in 2026. If met, it would imply a meaningful 11% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 50% to US$0.10. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$23.0m and earnings per share (EPS) of US$0.10 in 2026. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

The consensus price target fell 14% to US$8.25, with the analysts signalling that the weaker revenue outlook was a more powerful indicator than the upgraded EPS forecasts.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Sono-Tek's rate of growth is expected to accelerate meaningfully, with the forecast 8.8% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 6.4% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 7.5% per year. Sono-Tek is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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 Sono-Tek following these results. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 Sono-Tek going out as far as 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Sono-Tek has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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.