Last week, you might have seen that Sunnova Energy International Inc. (NYSE:NOVA) released its full-year result to the market. The early response was not positive, with shares down 6.3% to US$16.73 in the past week. It was a pretty bad result overall; while revenues were in line with expectations at US$132m, statutory losses exploded to US$4.14 per share. 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 analysts’ statutory forecasts suggest is in store for next year.
Taking into account the latest results, the most recent consensus for Sunnova Energy International from seven analysts is for revenues of US$166.8m in 2020, which is a huge 27% increase on its sales over the past 12 months. Statutory losses are forecast to balloon 67% to US$1.36 per share. Before this latest report, the consensus had been expecting revenues of US$165.4m and US$0.85 per share in losses. Analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.
Despite expectations of heavier losses next year, analysts have lifted their price target 30% to US$21.75, perhaps implying these losses are not expected to be recurring over the long term. 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. Currently, the most bullish analyst values Sunnova Energy International at US$26.00 per share, while the most bearish prices it at US$18.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Sunnova Energy International shareholders.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. We can infer from the latest estimates that analysts are expecting a continuation of Sunnova Energy International’s historical trends, as next year’s forecast 27% revenue growth is roughly in line with 26% annual revenue growth over the past year. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 3.2% next year. So although Sunnova Energy International is expected to maintain its revenue growth rate, it’s definitely expected to grow faster than the wider market.
The Bottom Line
The most important thing to take away is that analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn’t be too quick to come to a conclusion on Sunnova Energy International. Long-term earnings power is much more important than next year’s profits. We have forecasts for Sunnova Energy International going out to 2024, and you can see them free on our platform here.
You can also view our analysis of Sunnova Energy International’s balance sheet, and whether we think Sunnova Energy International is carrying too much debt, for free on our platform here.
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