It's been a sad week for Sonim Technologies, Inc. (NASDAQ:SONM), who've watched their investment drop 10% to US$0.61 in the week since the company reported its yearly result. It was a curious result overall, with revenues coming in 13% below what the analyst had expected, at US$94m. The company broke even in terms of statutory earnings per share (EPS). Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.
After the latest results, the one analyst covering Sonim Technologies are now predicting revenues of US$118.0m in 2024. If met, this would reflect a sizeable 26% improvement in revenue compared to the last 12 months. Sonim Technologies is also expected to turn profitable, with statutory earnings of US$0.01 per share. In the lead-up to this report, the analyst had been modelling revenues of US$117.3m and earnings per share (EPS) of US$0.06 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.
It might be a surprise to learn that the consensus price target fell 90% to US$2.00, with the analyst clearly linking lower forecast earnings to the performance of the stock price.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sonim Technologies' past performance and to peers in the same industry. One thing stands out from these estimates, which is that Sonim Technologies is forecast to grow faster in the future than it has in the past, with revenues expected to display 26% annualised growth until the end of 2024. If achieved, this would be a much better result than the 14% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 5.1% per year. So it looks like Sonim Technologies is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 2025, which can be seen for free on our platform here.
You still need to take note of risks, for example - Sonim Technologies has 2 warning signs we think you should be aware of.
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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.