Earnings Update: TPI Composites, Inc. (NASDAQ:TPIC) Just Reported And Analysts Are Trimming Their Forecasts
Last week saw the newest annual earnings release from TPI Composites, Inc. (NASDAQ:TPIC), an important milestone in the company's journey to build a stronger business. Results look to have been somewhat negative - revenue fell 2.8% short of analyst estimates at US$1.5b, although statutory losses were somewhat better. The per-share loss was US$4.16, 21% smaller than the analysts were expecting prior to the result. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for TPI Composites
Following the recent earnings report, the consensus from 13 analysts covering TPI Composites is for revenues of US$1.40b in 2024. This implies a small 3.6% decline in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 60% to US$1.48. Before this latest report, the consensus had been expecting revenues of US$1.49b and US$1.20 per share in losses. So it's pretty clear the analysts have mixed opinions on TPI Composites after this update; revenues were downgraded and per-share losses expected to increase.
The average price target was broadly unchanged at US$4.59, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic TPI Composites analyst has a price target of US$8.00 per share, while the most pessimistic values it at US$2.50. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
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. We would highlight that revenue is expected to reverse, with a forecast 3.6% annualised decline to the end of 2024. That is a notable change from historical growth of 4.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.7% annually for the foreseeable future. It's pretty clear that TPI Composites' 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 TPI Composites. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$4.59, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for TPI Composites going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for TPI Composites (2 are concerning!) that we have uncovered.
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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.
