TransAct Technologies Incorporated (NASDAQ:TACT) Analysts Just Trimmed Their Revenue Forecasts By 15%

One thing we could say about the analysts on TransAct Technologies Incorporated (NASDAQ:TACT) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the current consensus, from the dual analysts covering TransAct Technologies, is for revenues of US$46m in 2024, which would reflect a painful 24% reduction in TransAct Technologies' sales over the past 12 months. After this downgrade, the company is anticipated to report a loss of US$0.25 in 2024, a sharp decline from a profit over the last year. Yet before this consensus update, the analysts had been forecasting revenues of US$54m and losses of US$0.23 per share in 2024. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for TransAct Technologies

The consensus price target fell 7.9% to US$8.75, implicitly signalling that lower earnings per share are a leading indicator for TransAct Technologies' valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 31% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 12% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.0% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - TransAct Technologies is expected to lag the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at TransAct Technologies. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of TransAct Technologies going forwards.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with TransAct Technologies, including its declining profit margins. Learn more, and discover the 3 other concerns we've identified, for free on our platform here.

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