It's been a mediocre week for Close the Loop Ltd (ASX:CLG) shareholders, with the stock dropping 18% to AU$0.23 in the week since its latest yearly results. Results were roughly in line with estimates, with revenues of AU$213m and statutory earnings per share of AU$0.02. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Close the Loop

Taking into account the latest results, the most recent consensus for Close the Loop from two analysts is for revenues of AU$231.3m in 2025. If met, it would imply a notable 8.6% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 18% to AU$0.024. In the lead-up to this report, the analysts had been modelling revenues of AU$229.9m and earnings per share (EPS) of AU$0.025 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The average price target fell 8.9% to AU$0.61, with reduced earnings forecasts clearly tied to a lower valuation estimate.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Close the Loop's revenue growth is expected to slow, with the forecast 8.6% annualised growth rate until the end of 2025 being well below the historical 42% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.7% per year. Even after the forecast slowdown in growth, it seems obvious that Close the Loop is also expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Close the Loop. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Close the Loop's future valuation.

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 Close the Loop 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 3 warning signs for Close the Loop 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.