The latest analyst coverage could portend a bad day Smith Micro Software, Inc. (NASDAQ:SMSI), with analysts making cuts to their statutory estimates across the board, which could leave shareholders somewhat shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, indicating that analysts have had a major negative impact on the sector.
After the latest downgrade, the current consensus from Smith Micro Software’s three analysts is for revenues of $40 million in 2024, which would reflect an uncomfortable 9.2% decline in Smith Micro Software’s revenue over the last twelve months . Loss per share is expected to decline sharply in the near future, down 49% to $0.20. But prior to the latest estimates, the analysts were predicting revenues of $48 million and a loss of $0.14 per share in 2024. So there has been a clear change in sentiment, with the analysts making a notable cut to revenue estimates for next year. carried out for years. while at the same time increasing their loss per share forecasts.
Check out our latest analysis for Smith Micro Software
The consensus price target fell 14% to $3.17, with analysts clearly concerned about the company due to weaker revenue and earnings prospects.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts compare to past performance, and whether the forecasts are more or less bullish compared to other companies in the industry. We highlight that sales are expected to turn around, with an expected annualized revenue decline of 7.4% through the end of 2024. That’s a notable change from historical growth of 9.4% over the past five years. In contrast, our data suggests that other companies (with analyst coverage) in the same sector are expected to see their revenue grow 12% annually for the foreseeable future. It’s pretty clear that Smith Micro Software’s earnings are expected to significantly underperform those of the broader industry.
It comes down to
The most important thing to note from this downgrade is that the consensus has increased expected losses for next year, indicating that all is not well at Smith Micro Software. Unfortunately, they have also lowered their revenue estimates, and the latest forecasts imply that the company will grow revenue more slowly than the broader market. After such a big change in analyst sentiment, we would understand if readers were now feeling a little wary of Smith Micro Software.
That said, the long-term trajectory of corporate earnings is much more important than next year. At Simply Wall St we have a full range of analyst estimates for Smith Micro Software going out to 2025, and you can see them for free on our platform here.
Of course, seeing the company management invest large sums of money in a stock can be just as useful as knowing whether analysts are lowering their estimates. So you might want to look for this too free list of stocks that insiders are buying.
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This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. We aim to provide you with targeted, long-term analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Simply Wall St has no positions in the stocks mentioned.