Shareholders of VirTra, Inc. (NASDAQ:VTSI) will be pleased this week, given that the stock price is up 12% to US$7.36 following its latest quarterly results. It was a mildly positive result, with revenues exceeding expectations at US$7.5m, while statutory earnings per share (EPS) of US$0.05 were in line with analyst forecasts. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Following the latest results, VirTra's twin analysts are now forecasting revenues of US$36.1m in 2025. This would be a decent 14% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to decline 16% to US$0.43 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$36.1m and earnings per share (EPS) of US$0.89 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

The average price target fell 36% to US$11.25, with reduced earnings forecasts clearly tied to a lower valuation estimate.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that VirTra's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.4% annually. So it's pretty clear that, while VirTra's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for VirTra. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of VirTra's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on VirTra. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for VirTra (of which 1 doesn't sit too well with us!) you should know about.

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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.