Coveo Solutions Inc. (TSE:CVO) Just Released Its Second-Quarter Earnings: Here's What Analysts Think

As you might know, Coveo Solutions Inc. (TSE:CVO) recently reported its quarterly numbers. Revenues of US$40m were in line with expectations, although statutory losses per share were US$0.03, some 14% smaller than was expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the most recent consensus for Coveo Solutions from eight analysts is for revenues of US$161.4m in 2027. If met, it would imply a credible 4.5% increase on its revenue over the past 12 months. Losses are expected to be contained, narrowing 13% from last year to US$0.17. Before this latest report, the consensus had been expecting revenues of US$162.1m and US$0.15 per share in losses. While this year's revenue estimates held steady, there was also a notable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

Check out our latest analysis for Coveo Solutions

As a result, there was no major change to the consensus price target of CA$6.64, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Coveo Solutions at CA$10.01 per share, while the most bearish prices it at CA$4.24. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Coveo Solutions' revenue growth is expected to slow, with the forecast 9.2% annualised growth rate until the end of 2027 being well below the historical 12% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% per year. Factoring in the forecast slowdown in growth, it seems obvious that Coveo Solutions is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Coveo Solutions' revenue is expected to perform worse than the wider industry. The consensus price target held steady at CA$6.64, 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 Coveo Solutions. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Coveo Solutions going out to 2029, 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 1 warning sign for Coveo Solutions that you need to be mindful of.

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