Broadwind Energy, Inc. (NASDAQ:BWEN) shares fell 4.7% to US$2.05 in the week since its latest annual results. Revenues of US$178m arrived in line with expectations, although statutory losses per share were US$0.28, an impressive 27% smaller than what broker models predicted. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
Taking into account the latest results, the current consensus from Broadwind Energy's only analyst is for revenues of US$207.5m in 2020, which would reflect a meaningful 16% increase on its sales over the past 12 months. Earnings are expected to improve, with Broadwind Energy forecast to report a statutory profit of US$0.17 per share. Before this latest report, the consensus had been expecting revenues of US$192.8m and US$0.095 per share in losses. So we can see there's been a pretty clear upgrade to expectations following the latest results, with a small increase to revenues expected to lead to profitability earlier than previously forecast.
It will come as no surprise to learn that analysts have increased their price target for Broadwind Energy 11% to US$2.75 on the back of these upgrades.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that Broadwind Energy's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow at 16%, well above its historical decline of 11% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the market are forecast to see their revenue grow 3.0% per year. So it looks like Broadwind Energy is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away from these updates is that analysts now expect Broadwind Energy to become profitable next year, compared to previous expectations that it would report a loss. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.
It might also be worth considering whether Broadwind Energy's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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