One thing we could say about the covering analyst on Coda Octopus Group, Inc. (NASDAQ:CODA) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

Following the latest downgrade, Coda Octopus Group's solitary analyst currently expects revenues in 2024 to be US$20m, approximately in line with the last 12 months. Statutory earnings per share are anticipated to dive 21% to US$0.22 in the same period. Before this latest update, the analyst had been forecasting revenues of US$26m and earnings per share (EPS) of US$0.45 in 2024. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a large cut to earnings per share numbers as well.

View our latest analysis for Coda Octopus Group

It'll come as no surprise then, to learn that the analyst has cut their price target 25% to US$7.50.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's also worth noting that the years of declining sales look to have come to an end, with the forecast for flat revenues to the end of 2024. Historically, Coda Octopus Group's sales have shrunk approximately 1.2% annually 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 5.0% per year. 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 most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Coda Octopus Group's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Coda Octopus Group.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.