The analysts covering Smith Micro Software, Inc. (NASDAQ:SMSI) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the current consensus from Smith Micro Software's two analysts is for revenues of US$26m in 2025 which - if met - would reflect a sizeable 27% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 75% to US$0.68 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$32m and losses of US$0.58 per share in 2025. 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.

See our latest analysis for Smith Micro Software

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Smith Micro Software's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 27% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 10% a year 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 12% per year. So it looks like Smith Micro Software 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 analysts increased their loss per share estimates for this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better 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 Smith Micro Software, and their negativity could be grounds for caution.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Smith Micro Software's financials, such as major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 2 other warning signs we've identified.

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 with high insider ownership.

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