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Need To Know: Analysts Just Made A Substantial Cut To Their Telos Corporation (NASDAQ:TLS) Estimates

Today is shaping up negative for Telos Corporation (NASDAQ:TLS) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the consensus from six analysts covering Telos is for revenues of US$221m in 2023, implying a measurable 7.7% decline in sales compared to the last 12 months. Losses are supposed to balloon 51% to US$0.85 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$257m and losses of US$0.76 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for Telos

earnings-and-revenue-growth
earnings-and-revenue-growth

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Telos' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 6.2% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 18% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Telos is expected to lag the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at Telos. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Telos' revenues are expected to grow slower than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Telos, and their negativity could be grounds for caution.

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With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Telos going out to 2024, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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.

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