Explore Smith Micro Software’s Fair Values from the Community and select yours
It’s shaping up to be a tough period for Smith Micro Software, Inc. (NASDAQ:SMSI), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. Revenues missed expectations somewhat, coming in at US$4.4m, but statutory earnings fell catastrophically short, with a loss of US$0.78 some 208% larger than what the analysts had predicted. 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. Readers will be glad to know we’ve aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Smith Micro Software after the latest results.
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Taking into account the latest results, the current consensus from Smith Micro Software’s twin analysts is for revenues of US$19.3m in 2025. This would reflect a credible 3.2% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 45% to US$0.81. Before this earnings announcement, the analysts had been modelling revenues of US$22.2m and losses of US$0.85 per share in 2025. We can see there’s definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year’s revenue estimates, while at the same time reducing their loss estimates.
Check out our latest analysis for Smith Micro Software
The consensus price target fell 13% to US$3.50, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses.
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 6.4% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 17% 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 13% annually for the foreseeable future. So although Smith Micro Software’s revenue growth is expected to improve, it is still expected to grow slower than the industry.
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. 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.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have analyst estimates for Smith Micro Software going out as far as 2027, and you can see them free on our platform here.
Before you take the next step you should know about the 4 warning signs for Smith Micro Software (1 makes us a bit uncomfortable!) that we have uncovered.
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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.
