This Coda Octopus Group, Inc. (NASDAQ:CODA) Analyst Is Way More Bearish Than They Used To Be
The latest analyst coverage could presage a bad day for Coda Octopus Group, Inc. (NASDAQ:CODA), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the downgrade, the current consensus from Coda Octopus Group's solo analyst is for revenues of US$26m in 2024 which - if met - would reflect a sizeable 24% increase on its sales over the past 12 months. Per-share earnings are expected to leap 21% to US$0.45. Before this latest update, the analyst had been forecasting revenues of US$30m and earnings per share (EPS) of US$0.64 in 2024. Indeed, we can see that the analyst is a lot more bearish about Coda Octopus Group's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
See our latest analysis for Coda Octopus Group
It'll come as no surprise then, to learn that the analyst has cut their price target 17% to US$10.00.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analyst is definitely expecting Coda Octopus Group's growth to accelerate, with the forecast 19% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.1% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.2% annually. 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 issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Coda Octopus Group. While the analyst did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of Coda Octopus Group.
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.
