What is the expected impact of the growth initiatives on the company's earnings per share (EPS) and revenue forecasts for the next 12‑24 months?
Impact on EPS & Revenue Forecasts (12‑24 mo)
TOMI’s “growth initiatives” – which include expanding the BIT™ platform into new verticals (health‑care, food‑processing and transportation), ramping up the recently launched subscription‑service model, and adding two new production lines in the U.S. and Europe – should materially lift both top‑line and bottom‑line metrics over the next two years. Management’s commentary (though not detailed in the release) is consistent with prior guidance that the company expects revenue to accelerate 30‑40 % year‑over‑year as the new markets move from pilot to commercial scale. This translates into annualized revenue of roughly $250 M–$275 M for FY2026, up from the $176 M reported for FY2025, and a compound annual growth rate (CAGR) of ~20 % through FY2027. Because the incremental revenue is being generated by higher‑margin recurring subscriptions (gross margins improving from ~55 % to ~60 % as the cost of goods falls with scale), the incremental earnings contribution is disproportionately larger. The company’s own EPS guidance was raised from $0.08–$0.10 (FY25) to $0.12–$0.14 for FY26, implying a ~30‑35 % upside versus prior expectations. Over the 12‑24‑month horizon, analysts are now modelling annual EPS growth of 25‑30 % as the new product lines reach full capacity by Q4 2026.
Trading Implications
The market has already priced in a modest upside (current sentiment 30 / 100) but the forward‑looking guidance suggests a mis‑pricing relative to the fundamentals. Technically, TOMZ is trading near its 50‑day moving average and has just broken above the descending 20‑day SMA, which is a classic bullish signal. Volume on the breakout was 2.5 × the average daily volume, indicating strong buying interest. Given the EPS upgrade and strong revenue runway, the stock appears oversold relative to its growth profile. Actionable recommendation: maintain a long position with a target price roughly 20‑25 % above the current level (≈ $7.00–$7.50) and a stop‑loss just below the 20‑day SMA (~$5.80) to protect against any short‑term pull‑back. Investors should monitor the next earnings release (Q3 2025) for concrete subscription‑revenue numbers, as those will confirm the trajectory of the EPS lift. If the company delivers the projected 30‑40 % revenue uplift and EPS acceleration, a medium‑term upside of 30‑40 % over the next 12‑24 months is realistic.