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Nordex SE (ETR:NDX1) Just Reported Third-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

Nordex SE (ETR:NDX1) investors will be delighted, with the company turning in some strong numbers with its latest results. The results overall were pretty good, with revenues of €1.7b exceeding expectations and statutory losses coming in at just€0.35 per share, some 42% below what the analysts had forecast. Following the result, the 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Nordex

earnings-and-revenue-growth
earnings-and-revenue-growth

Following the latest results, Nordex's eight analysts are now forecasting revenues of €5.63b in 2023. This would be a modest 5.1% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 79% to €0.49. Before this earnings announcement, the analysts had been modelling revenues of €5.66b and losses of €0.46 per share in 2023. So it's pretty clear consensus is mixed on Nordex after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a pronounced increase to per-share loss expectations.

As a result, there was no major change to the consensus price target of €12.39, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Nordex, with the most bullish analyst valuing it at €16.00 and the most bearish at €9.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. It's pretty clear that there is an expectation that Nordex's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 4.0% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.8% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Nordex.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Nordex's revenues are expected to perform worse than the wider industry. The consensus price target held steady at €12.39, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Nordex. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Nordex analysts - going out to 2024, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Nordex that we have uncovered.

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.

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