Market forces rained on the parade of Duos Technologies Group, Inc. (NASDAQ:DUOT) shareholders today, when the analysts downgraded their forecasts for next year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.
Following the downgrade, the current consensus from Duos Technologies Group's two analysts is for revenues of US$20m in 2024 which - if met - would reflect a huge 65% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 60% to US$0.51 per share. However, before this estimates update, the consensus had been expecting revenues of US$25m and US$0.38 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
See our latest analysis for Duos Technologies Group
The consensus price target fell 16% to US$7.63, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.
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. It's clear from the latest estimates that Duos Technologies Group's rate of growth is expected to accelerate meaningfully, with the forecast 49% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 1.5% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Duos Technologies Group is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Duos Technologies Group.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Duos Technologies Group going out as far as 2025, and you can see them free on our platform here.
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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.