One Pioneer Power Solutions, Inc. (NASDAQ:PPSI) Broker Just Cut Their Revenue Forecasts By 12%
One thing we could say about the covering analyst on Pioneer Power Solutions, Inc. (NASDAQ:PPSI) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as the analyst signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
After the downgrade, the solo analyst covering Pioneer Power Solutions is now predicting revenues of US$63m in 2024. If met, this would reflect a huge 47% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to soar 141% to US$0.43. Prior to this update, the analyst had been forecasting revenues of US$71m and earnings per share (EPS) of US$0.45 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a substantial drop in revenue estimates and a small dip in earnings per share numbers as well.
Check out our latest analysis for Pioneer Power Solutions
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Pioneer Power Solutions' rate of growth is expected to accelerate meaningfully, with the forecast 36% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 4.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.3% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Pioneer Power Solutions to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Pioneer Power Solutions going forwards.
That said, the covering analyst might have good reason to be negative on Pioneer Power Solutions, given concerns around earnings quality. Learn more, and discover the 2 other concerns we've identified, for free on our platform here.
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.
