It's shaping up to be a tough period for Ballard Power Systems Inc. (TSE:BLDP), which a week ago released some disappointing third-quarter results that could have a notable impact on how the market views the stock. Revenues missed expectations somewhat, coming in at US$26m and leading to a corresponding blowout in statutory losses. The loss per share was US$0.05, some 11% larger than the analysts forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 Ballard Power Systems' nine analysts is for revenues of US$137.2m in 2021, which would reflect a solid 17% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 38% to US$0.13. Before this earnings announcement, the analysts had been modelling revenues of US$151.9m and losses of US$0.12 per share in 2021. Overall it looks as though the analysts are negative in this update. Although sales forecasts held steady, the consensus also made a to its losses per share forecasts.
There was no major change to the consensus price target of US$23.94, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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 Ballard Power Systems, with the most bullish analyst valuing it at US$34.85 and the most bearish at US$27.27 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. It's clear from the latest estimates that Ballard Power Systems' rate of growth is expected to accelerate meaningfully, with the forecast 17% revenue growth noticeably faster than its historical growth of 11%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Ballard Power Systems to grow faster than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Ballard Power Systems. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at US$23.94, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Ballard Power Systems. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Ballard Power Systems going out to 2024, and you can see them free on our platform here..
It is also worth noting that we have found 2 warning signs for Ballard Power Systems that you need to take into consideration.
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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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