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One thing we could say about the analysts on Smith Micro Software, Inc. (NASDAQ:SMSI) - 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 analysts seeing grey clouds on the horizon.
Following the downgrade, the latest consensus from Smith Micro Software's dual analysts is for revenues of US$26m in 2025, which would reflect a huge 27% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 75% to US$0.68 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$32m and losses of US$0.58 per share in 2025. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.
View our latest analysis for Smith Micro Software
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Smith Micro Software's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Smith Micro Software is forecast to grow faster in the future than it has in the past, with revenues expected to display 27% annualised growth until the end of 2025. If achieved, this would be a much better result than the 10% 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 12% annually. Not only are Smith Micro Software's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Smith Micro Software, and we wouldn't blame shareholders for feeling a little more cautious themselves.
That said, the analysts might have good reason to be negative on Smith Micro Software, given major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 2 other concerns we've identified.