One thing we could say about the analysts on Electro Optic Systems Holdings Limited (ASX:EOS) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the consensus from dual analysts covering Electro Optic Systems Holdings is for revenues of AU$165m in 2022, implying a discernible 2.0% decline in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of AU$194m in 2022. The consensus view seems to have become more pessimistic on Electro Optic Systems Holdings, noting the substantial drop in revenue estimates in this update.

Check out our latest analysis for Electro Optic Systems Holdings

The consensus price target rose 47% to AU$3.50, with the analysts clearly more optimistic about Electro Optic Systems Holdings' prospects following this update.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Electro Optic Systems Holdings' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 4.0% by the end of 2022. This indicates a significant reduction from annual growth of 32% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.7% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Electro Optic Systems Holdings is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Electro Optic Systems Holdings after today.

Unsatisfied? We have estimates for Electro Optic Systems Holdings from its dual analysts out until 2024, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.