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Kopin Corporation (NASDAQ:KOPN) defied analyst predictions to release its annual results, which were ahead of market expectations. Revenues and losses per share both beat expectations, with revenues of US$30m leading estimates by 2.5%. Statutory losses were somewhat smaller than analysts expected, coming in at US$0.37 per share. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
Taking into account the latest results, the current consensus from Kopin's twin analysts is for revenues of US$30.3m in 2020, which would reflect a satisfactory 2.6% increase on its sales over the past 12 months. Statutory losses are forecast to balloon 46% to US$0.20 per share. Before this latest report, the consensus had been expecting revenues of US$39.1m and US$0.21 per share in losses. So there's been quite a change-up of views after the latest results, with analysts making a serious cut to their revenue forecasts while also granting a slight bump in to the earnings per share numbers.
Analysts have cut their price target 29% to US$1.50 per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. For example, we noticed that Kopin's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow at 2.6%, well above its historical decline of 5.0% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 8.9% per year. So although Kopin's revenue growth is expected to improve, it is still expected to grow slower than the market.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. Unfortunately, analysts also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider market. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings per share are more important to value creation for shareholders. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Kopin. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Kopin going out as far as 2021, and you can see them free on our platform here.
We also provide an overview of the Kopin Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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