Sono-Tek Corporation (NASDAQ:SOTK) just released its first-quarter report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 4.7% to hit US$5.0m. Sono-Tek also reported a statutory profit of US$0.02, which was an impressive 100% above what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following last week's earnings report, Sono-Tek's twin analysts are forecasting 2025 revenues to be US$20.8m, approximately in line with the last 12 months. Statutory earnings per share are expected to dip 8.4% to US$0.10 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$21.7m and earnings per share (EPS) of US$0.08 in 2025. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the sizeable expansion in to the earnings per share numbers.
There's been no real change to the average price target of US$9.88, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.3% by the end of 2025. This indicates a significant reduction from annual growth of 7.0% 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 6.8% per year. It's pretty clear that Sono-Tek's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Sono-Tek following these results. 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. Yet - earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$9.88, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Sono-Tek. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Sono-Tek going out as far as 2027, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with Sono-Tek (including 1 which can't be ignored) .
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com