Some Advanced Energy Industries, Inc. (NASDAQ:AEIS) Analysts Just Made A Major Cut To Next Year's Estimates
Today is shaping up negative for Advanced Energy Industries, Inc. (NASDAQ:AEIS) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. 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 latest downgrade, the nine analysts covering Advanced Energy Industries provided consensus estimates of US$1.5b revenue in 2024, which would reflect a chunky 9.3% decline on its sales over the past 12 months. Statutory earnings per share are supposed to tumble 35% to US$2.29 in the same period. Before this latest update, the analysts had been forecasting revenues of US$1.7b and earnings per share (EPS) of US$3.79 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.
Check out our latest analysis for Advanced Energy Industries
Despite the cuts to forecast earnings, there was no real change to the US$108 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Advanced Energy Industries' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 9.3% by the end of 2024. This indicates a significant reduction from annual growth of 20% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.3% per year. It's pretty clear that Advanced Energy Industries' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Advanced Energy Industries. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Advanced Energy Industries.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Advanced Energy Industries going out to 2025, and you can see them 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 that insiders are buying.
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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.
