This Broker Just Slashed Their Data I/O Corporation (NASDAQ:DAIO) Earnings Forecasts
Today is shaping up negative for Data I/O Corporation (NASDAQ:DAIO) shareholders, with the covering analyst delivering a substantial negative revision to next year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.
Following the latest downgrade, Data I/O's sole analyst currently expects revenues in 2024 to be US$29m, approximately in line with the last 12 months. Statutory earnings per share are anticipated to plunge 64% to US$0.07 in the same period. Before this latest update, the analyst had been forecasting revenues of US$33m and earnings per share (EPS) of US$0.28 in 2024. Indeed, we can see that the analyst is a lot more bearish about Data I/O's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
View our latest analysis for Data I/O
It'll come as no surprise then, to learn that the analyst has cut their price target 38% to US$5.00.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2024 compared to the historical decline of 2.3% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 4.9% annually. So while a broad number of companies are forecast to grow, unfortunately Data I/O is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Data I/O. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Data I/O's revenues are expected to grow slower than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Data I/O.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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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.
