IRIDEX Corporation (NASDAQ:IRIX) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasts. Revenues missed expectations somewhat, coming in at US$13m, but statutory earnings fell catastrophically short, with a loss of US$0.07 some 600% larger than what the analyst had predicted. The analyst 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. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.

Taking into account the latest results, IRIDEX's lone analyst currently expect revenues in 2026 to be US$52.5m, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 41% to US$0.12. Yet prior to the latest earnings, the analyst had been forecasting revenues of US$53.0m and losses of US$0.05 per share in 2026. While this year's revenue estimates held steady, there was also a considerable increase to loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The consensus price target fell 8.3% to US$2.75per share, with the analyst clearly concerned by ballooning losses.

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. For example, we noticed that IRIDEX's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3.7% growth to the end of 2026 on an annualised basis. That is well above its historical decline of 1.3% 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 7.6% annually for the foreseeable future. So although IRIDEX's revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The most important thing to take away is that the analyst increased their loss per share estimates for next year. Fortunately, the analyst also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that IRIDEX's revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of IRIDEX's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2028, which can be seen for free on our platform here.

You still need to take note of risks, for example - IRIDEX has 1 warning sign we think you should be aware of.

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.