One SuperCom Ltd. (NASDAQ:SPCB) Analyst Just Cut Their EPS Forecasts
The latest analyst coverage could presage a bad day for SuperCom Ltd. (NASDAQ:SPCB), 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 most recent consensus for SuperCom from its one analyst is for revenues of US$19m in 2023 which, if met, would be a decent 19% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 35% to US$2.26. Yet prior to the latest estimates, the analyst had been forecasting revenues of US$26m and losses of US$1.00 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a serious cut to their revenue forecasts while also expecting losses per share to increase.
See our latest analysis for SuperCom
The consensus price target fell 50% to US$5.00, with the analyst clearly concerned about the company following the weaker revenue and earnings outlook.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that SuperCom is forecast to grow faster in the future than it has in the past, with revenues expected to display 15% annualised growth until the end of 2023. If achieved, this would be a much better result than the 24% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.2% annually. Not only are SuperCom's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analyst increased their loss per share estimates for next year. While the analyst did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
That said, this broker might have good reason to be negative on SuperCom, given a short cash runway. For more information, you can click here to discover this and the 2 other risks we've identified.
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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.
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