Earnings Update: iPower Inc. (NASDAQ:IPW) Just Reported And Analysts Are Trimming Their Forecasts
The analyst might have been a bit too bullish on iPower Inc. (NASDAQ:IPW), given that the company fell short of expectations when it released its second-quarter results last week. Earnings missed the mark badly, with revenues of US$17m falling 31% short of expectations. Losses correspondingly increased, with a US$0.06 per-share statutory loss some 20% larger than what the analyst expected. Following the result, the analyst has 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 estimate suggests is in store for next year.
View our latest analysis for iPower
Taking into account the latest results, the single analyst covering iPower provided consensus estimates of US$83.2m revenue in 2024, which would reflect a noticeable 4.3% decline over the past 12 months. Losses are predicted to fall substantially, shrinking 22% to US$0.20. Yet prior to the latest earnings, the analyst had been forecasting revenues of US$105.5m and losses of US$0.13 per share in 2024. There's been a definite change in sentiment in this update, with the analyst administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.
The consensus price target fell 33% to US$1.00, with the analyst clearly concerned about the company following the weaker revenue and earnings outlook.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 8.4% by the end of 2024. This indicates a significant reduction from annual growth of 21% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.3% annually for the foreseeable future. It's pretty clear that iPower's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at iPower. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 2025, which can be seen for free on our platform here.
It is also worth noting that we have found 3 warning signs for iPower that you need to take into consideration.
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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.
