- Oops!Something went wrong.Please try again later.
One thing we could say about the analysts on FTC Solar, Inc. (NASDAQ:FTCI) - 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) forecasts went under the knife, suggesting analysts have soured majorly on the business.
Following the downgrade, the latest consensus from FTC Solar's eight analysts is for revenues of US$434m in 2022, which would reflect a major 104% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 94% to US$0.064. Before this latest update, the analysts had been forecasting revenues of US$537m and earnings per share (EPS) of US$0.076 in 2022. So we can see that the consensus has become notably more bearish on FTC Solar's outlook with these numbers, making a measurable cut to next year's revenue estimates. Furthermore, they expect the business to be loss-making next year, compared to their previous forecasts of a profit.
The consensus price target fell 34% to US$8.31, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic FTC Solar analyst has a price target of US$12.00 per share, while the most pessimistic values it at US$4.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. The analysts are definitely expecting FTC Solar's growth to accelerate, with the forecast 77% annualised growth to the end of 2022 ranking favourably alongside historical growth of 39% per annum over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that FTC Solar is expected to grow much faster than its industry.
The Bottom Line
The biggest low-light for us was that the forecasts for FTC Solar dropped from profits to a loss next year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of FTC Solar.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple FTC Solar analysts - going out to 2024, 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.