Downgrade: Here's How Analysts See FTC Solar, Inc. (NASDAQ:FTCI) Performing In The Near Term
Today is shaping up negative for FTC Solar, Inc. (NASDAQ:FTCI) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
After this downgrade, FTC Solar's eight analysts are now forecasting revenues of US$238m in 2024. This would be a substantial 83% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 61% to US$0.18 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$419m and losses of US$0.072 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
View our latest analysis for FTC Solar
The consensus price target fell 69% to US$1.29, implicitly signalling that lower earnings per share are a leading indicator for FTC Solar's valuation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that FTC Solar's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 62% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 22% a year over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.2% annually. So it looks like FTC Solar is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at FTC Solar. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
There might be good reason for analyst bearishness towards FTC Solar, like dilutive stock issuance over the past year. For more information, you can click here to discover this and the 3 other risks we've identified.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.
