One thing we could say about the analysts on Electrovaya Inc. (TSE:ELVA) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the latest consensus from Electrovaya's four analysts is for revenues of US$94m in 2025, which would reflect a sizeable 91% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 2,245% to US$0.41. Prior to this update, the analysts had been forecasting revenues of US$115m and earnings per share (EPS) of US$0.52 in 2025. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

See our latest analysis for Electrovaya

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. It's clear from the latest estimates that Electrovaya's rate of growth is expected to accelerate meaningfully, with the forecast 68% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 44% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 23% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Electrovaya is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Electrovaya, and a few readers might choose to steer clear of the stock.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Electrovaya, including dilutive stock issuance over the past year. Learn more, and discover the 3 other flags we've identified, for free on our platform here.

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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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.