Coda Octopus Group, Inc. (NASDAQ:CODA) missed earnings with its latest yearly results, disappointing overly-optimistic forecasts. Results showed a clear earnings miss, with US$19m revenue coming in 9.0% lower than what the analystexpected. Statutory earnings per share (EPS) of US$0.28 missed the mark badly, arriving some 28% below what was expected. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.

See our latest analysis for Coda Octopus Group

Taking into account the latest results, Coda Octopus Group's lone analyst currently expect revenues in 2024 to be US$19.6m, approximately in line with the last 12 months. Statutory earnings per share are forecast to nosedive 21% to US$0.22 in the same period. In the lead-up to this report, the analyst had been modelling revenues of US$26.0m and earnings per share (EPS) of US$0.45 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a pretty serious reduction to revenue estimates and a large cut to earnings per share numbers as well.

The consensus price target fell 25% to US$7.50, 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. From these estimates it looks as though the analyst expects the years of declining revenue to come to an end, given the flat forecast out to 2024. That would be a definite improvement, given that the past five years have seen revenue shrink 1.2% annually. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.2% annually. So it's pretty clear that, although revenues are improving, Coda Octopus Group is still expected to grow slower than the 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Coda Octopus Group's future valuation.