CEVA, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
There's been a notable change in appetite for CEVA, Inc. (NASDAQ:CEVA) shares in the week since its quarterly report, with the stock down 15% to US$21.62. Revenues of US$26m missed forecasts by 15%, but CEVA managed to deliver a surprise (statutory) profit, with earnings per share of US$0.25 a decent improvement on the loss that the analysts were predicting. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for CEVA
Taking into account the latest results, the six analysts covering CEVA provided consensus estimates of US$110.7m revenue in 2023, which would reflect a chunky 9.3% decline over the past 12 months. Losses are predicted to fall substantially, shrinking 40% to US$0.79. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$128.6m and losses of US$0.40 per share in 2023. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.
The consensus price target fell 14% to US$28.14, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on CEVA, with the most bullish analyst valuing it at US$45.00 and the most bearish at US$20.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 18% by the end of 2023. This indicates a significant reduction from annual growth of 13% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 14% annually for the foreseeable future. It's pretty clear that CEVA's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at CEVA. 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. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on CEVA. Long-term earnings power is much more important than next year's profits. We have forecasts for CEVA going out to 2025, and you can see them free on our platform here.
We also provide an overview of the CEVA Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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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.
