Yahoo Finance Analysts Just Shaved Their Daqo New Energy Corp. (NYSE:DQ) Forecasts Dramatically
One thing we could say about the analysts on Daqo New Energy Corp. (NYSE:DQ) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.
Following the latest downgrade, the eight analysts covering Daqo New Energy provided consensus estimates of US$1.9b revenue in 2024, which would reflect a measurable 3.6% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to plummet 69% to US$0.79 in the same period. Before this latest update, the analysts had been forecasting revenues of US$2.4b and earnings per share (EPS) of US$3.73 in 2024. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.
Check out our latest analysis for Daqo New Energy
Despite the cuts to forecast earnings, there was no real change to the US$28.58 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Daqo New Energy's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 4.7% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 42% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 17% annually for the foreseeable future. It's pretty clear that Daqo New Energy's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Daqo New Energy's revenues are expected to grow slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Daqo New Energy after the downgrade.
Unfortunately, by using these new estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Daqo New Energy that suggests the company could be somewhat overvalued. You can learn more about our valuation methodology for free on our platform here.
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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.
