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€27.00: That's What Analysts Think SMA Solar Technology AG (ETR:S92) Is Worth After Its Latest Results

Simply Wall St
·3 mins read

SMA Solar Technology AG (ETR:S92) just released its annual report and things are looking bullish. It looks like a positive result overall, with revenues of €915m beating forecasts by 3.7%. Statutory losses of €0.25 per share were 3.7% smaller than the analysts expected, likely helped along by the higher revenues. The analysts 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for SMA Solar Technology

XTRA:S92 Past and Future Earnings March 29th 2020
XTRA:S92 Past and Future Earnings March 29th 2020

Taking into account the latest results, the current consensus from SMA Solar Technology's two analysts is for revenues of €1.00b in 2020, which would reflect a solid 9.4% increase on its sales over the past 12 months. SMA Solar Technology is also expected to turn profitable, with statutory earnings of €0.22 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of €1.02b and earnings per share (EPS) of €0.48 in 2020. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a pretty serious reduction to earnings per share numbers.

The consensus price target fell 10.0% to €27.00, with the weaker earnings outlook clearly leading valuation estimates.

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 SMA Solar Technology's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 9.4%, well above its historical decline of 2.9% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 6.7% per year. Not only are SMA Solar Technology's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will 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 SMA Solar Technology'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. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for SMA Solar Technology you should be aware of.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.