The analysts might have been a bit too bullish on Orion Energy Systems, Inc. (NASDAQ:OESX), given that the company fell short of expectations when it released its second-quarter results last week. Earnings fell badly short of analyst estimates, with US$19m revenue falling -11% short, and statutory losses of US$0.11 per share being -16% greater than forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Orion Energy Systems

Taking into account the latest results, the most recent consensus for Orion Energy Systems from two analysts is for revenues of US$97.8m in 2025. If met, it would imply a modest 6.7% increase on its revenue over the past 12 months. Losses are expected to increase slightly, to US$0.26 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$101.4m and losses of US$0.26 per share in 2025.

The average price target fell 44% to US$2.50, with the analysts clearly concerned about the weaker revenue outlook and expectation of ongoing losses.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Orion Energy Systems' past performance and to peers in the same industry. For example, we noticed that Orion Energy Systems' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 14% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 11% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.5% annually. Not only are Orion Energy Systems' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also downgraded Orion Energy Systems' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for Orion Energy Systems going out as far as 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Orion Energy Systems that you need to be mindful 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.