Analyst Forecasts Just Became More Bearish On Universal Electronics Inc. (NASDAQ:UEIC)
The analysts covering Universal Electronics Inc. (NASDAQ:UEIC) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the latest downgrade, the twin analysts covering Universal Electronics provided consensus estimates of US$337m revenue in 2026, which would reflect a considerable 14% decline on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 26% to US$1.22. However, before this estimates update, the consensus had been expecting revenues of US$378m and US$1.08 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.
Check out our latest analysis for Universal Electronics
The consensus price target fell 35% to US$4.25, implicitly signalling that lower earnings per share are a leading indicator for Universal Electronics' valuation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing that stands out from these estimates is that revenues are expected to keep falling until the end of 2026, roughly in line with the historical decline of 12% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 3.9% annually. So while a broad number of companies are forecast to grow, unfortunately Universal Electronics is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Universal Electronics' revenues are expected to grow slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Universal Electronics' future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Universal Electronics after today.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.
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 with high insider ownership.
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.