Bearish: Analysts Just Cut Their EMCORE Corporation (NASDAQ:EMKR) Revenue and EPS estimates

Today is shaping up negative for EMCORE Corporation (NASDAQ:EMKR) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the current consensus, from the three analysts covering EMCORE, is for revenues of US$84m in 2024, which would reflect a considerable 14% reduction in EMCORE's sales over the past 12 months. Losses are predicted to fall substantially, shrinking 68% to US$1.84 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$102m and losses of US$1.65 per share in 2024. 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.

Check out our latest analysis for EMCORE

The consensus price target fell 83% to US$2.00, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

Of course, another way to look at these forecasts is to place them into context against the industry itself. Over the past five years, revenues have declined around 5.9% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 26% decline in revenue until the end of 2024. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.2% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect EMCORE to suffer worse 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of EMCORE.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with EMCORE, including dilutive stock issuance over the past year. For more information, you can click here to discover this and the 4 other risks we've identified.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.