Titan Machinery Inc. (NASDAQ:TITN) Just Reported Earnings, And Analysts Cut Their Target Price
Last week, you might have seen that Titan Machinery Inc. (NASDAQ:TITN) released its annual result to the market. The early response was not positive, with shares down 7.9% to US$23.55 in the past week. Results overall were respectable, with statutory earnings of US$4.93 per share roughly in line with what the analysts had forecast. Revenues of US$2.8b came in 4.4% ahead of analyst predictions. 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 Titan Machinery
After the latest results, the six analysts covering Titan Machinery are now predicting revenues of US$3.00b in 2025. If met, this would reflect a solid 8.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to crater 35% to US$3.24 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.75b and earnings per share (EPS) of US$4.38 in 2025. While next year's revenue estimates increased, there was also a large cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.
The consensus price target fell 15% to US$31.80, suggesting that the analysts are primarily focused on earnings as the driver of value for this business. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Titan Machinery, with the most bullish analyst valuing it at US$40.00 and the most bearish at US$24.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Titan Machinery's revenue growth is expected to slow, with the forecast 8.8% annualised growth rate until the end of 2025 being well below the historical 17% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.6% annually. So it's pretty clear that, while Titan Machinery's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Titan Machinery. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Titan Machinery's future valuation.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Titan Machinery analysts - going out to 2027, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 2 warning signs for Titan Machinery that you need to be mindful of.
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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.
