Coda Octopus Group, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For Next Year
A week ago, Coda Octopus Group, Inc. (NASDAQ:CODA) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. Statutory revenue and earnings both blasted past expectations, with revenue of US$5.4m beating expectations by 25% and earnings per share (EPS) reaching US$0.10, some 400% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for Coda Octopus Group
After the latest results, the single analyst covering Coda Octopus Group are now predicting revenues of US$26.3m in 2021. If met, this would reflect a substantial 24% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 184% to US$0.62. Yet prior to the latest earnings, the analyst had been anticipated revenues of US$27.9m and earnings per share (EPS) of US$0.69 in 2021. The analyst seem less optimistic after the recent results, reducing their sales forecasts and making a real cut to earnings per share numbers.
The consensus price target fell 21% to US$11.00, with the weaker earnings outlook clearly leading valuation estimates.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Coda Octopus Group's rate of growth is expected to accelerate meaningfully, with the forecast 24% revenue growth noticeably faster than its historical growth of 3.8%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.3% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Coda Octopus Group is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Coda Octopus Group. They also downgraded their revenue estimates, although industry data suggests that Coda Octopus Group's revenues are expected to grow faster than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Coda Octopus Group going out as far as 2021, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with Coda Octopus Group .
This article by Simply Wall St is general in nature. 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.
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