VerticalScope Holdings Inc. (TSE:FORA) just released its latest quarterly report and things are not looking great. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of US$13m missed by 11%, and statutory earnings per share of US$0.01 fell short of forecasts by 38%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on VerticalScope Holdings after the latest results.
Taking into account the latest results, VerticalScope Holdings' eight analysts currently expect revenues in 2027 to be US$53.2m, approximately in line with the last 12 months. Statutory losses are forecast to balloon 91% to US$0.03 per share. Before this earnings report, the analysts had been forecasting revenues of US$57.6m and earnings per share (EPS) of US$0.012 in 2027. The analysts have made an abrupt about-face on VerticalScope Holdings, administering a small dip in to revenue forecasts and slashing the earnings outlook from a profit to loss.
View our latest analysis for VerticalScope Holdings
The consensus price target fell 6.3% to CA$4.14, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on VerticalScope Holdings, with the most bullish analyst valuing it at CA$6.12 and the most bearish at CA$2.75 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would also point out that the forecast 1.0% annualised revenue decline to the end of 2027 is better than the historical trend, which saw revenues shrink 5.0% annually over the past five years By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 18% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect VerticalScope Holdings to suffer worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts are expecting VerticalScope Holdings to become unprofitable 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. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of VerticalScope Holdings' future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for VerticalScope Holdings going out to 2028, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 2 warning signs for VerticalScope Holdings that you need to be mindful of.
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