One of the biggest stories of last week was how EDAP TMS S.A. (NASDAQ:FOCL) shares plunged 24% in the week since its latest third-quarter results, closing yesterday at US$3.32. Results look to have been somewhat negative - revenue fell 4.1% short of analyst estimates at US$11m, although statutory losses were somewhat better. The per-share loss was US$0.11, 56% smaller than the analysts were expecting prior to the result. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the recent earnings report, the consensus from five analysts covering EDAP TMS is for revenues of US$68.2m in 2027. This implies a chunky 16% decline in revenue compared to the last 12 months. Losses are expected to be contained, narrowing 13% from last year to US$0.69. Before this earnings announcement, the analysts had been modelling revenues of US$69.7m and losses of US$0.78 per share in 2027. Although the revenue estimates have fallen somewhat, EDAP TMS'future looks a little different to the past, with a favorable reduction in the loss per share forecasts in particular.
See our latest analysis for EDAP TMS
The consensus price target fell 5.7% to US$8.30, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic EDAP TMS analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$4.00. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the EDAP TMS' past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 13% by the end of 2027. This indicates a significant reduction from annual growth of 6.6% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - EDAP TMS is expected to lag the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on EDAP TMS. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for EDAP TMS going out to 2028, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 3 warning signs for EDAP TMS you should know about.
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