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As you might know, TPI Composites, Inc. (NASDAQ:TPIC) just kicked off its latest quarterly results with some very strong numbers. TPI Composites delivered a significant beat to revenue and earnings per share (EPS) expectations, with sales hitting US$474m, some 17% above indicated. Statutory EPS were US$1.13, an impressive 477% ahead of forecasts. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from TPI Composites' eleven analysts is for revenues of US$1.80b in 2021, which would reflect a meaningful 11% improvement in sales compared to the last 12 months. Earnings are expected to improve, with TPI Composites forecast to report a statutory profit of US$1.60 per share. In the lead-up to this report, the analysts had been modelling revenues of US$1.76b and earnings per share (EPS) of US$1.53 in 2021. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 19% to US$42.91per share. 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$47.00 per share, while the most pessimistic values it at US$30.00. 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. We would highlight that TPI Composites' revenue growth is expected to slow, with forecast 11% increase next year well below the historical 20%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 7.4% next year. Even after the forecast slowdown in growth, it seems obvious that TPI Composites is also expected to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around TPI Composites' earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple TPI Composites analysts - going out to 2022, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 3 warning signs for TPI Composites (of which 1 makes us a bit uncomfortable!) you should know about.
This article by Simply Wall St is general in nature. 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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