Yahoo Finance Advanced Energy Industries, Inc. Just Missed EPS By 57%: Here's What Analysts Think Will Happen Next
The analysts might have been a bit too bullish on Advanced Energy Industries, Inc. (NASDAQ:AEIS), given that the company fell short of expectations when it released its first-quarter results last week. Results showed a clear earnings miss, with US$327m revenue coming in 6.9% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$0.14 missed the mark badly, arriving some 57% below what was expected. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Advanced Energy Industries
After the latest results, the consensus from Advanced Energy Industries' nine analysts is for revenues of US$1.46b in 2024, which would reflect a small 6.6% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to plunge 36% to US$1.80 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.50b and earnings per share (EPS) of US$2.08 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.
The analysts made no major changes to their price target of US$106, suggesting the downgrades are not expected to have a long-term impact on Advanced Energy Industries' valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Advanced Energy Industries, with the most bullish analyst valuing it at US$130 and the most bearish at US$90.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 8.6% annualised decline to the end of 2024. That is a notable change from historical growth of 17% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.1% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Advanced Energy Industries is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Advanced Energy Industries going out to 2026, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Advanced Energy Industries , and understanding them should be part of your investment process.
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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.
