Ballard Power Systems Inc. (TSE:BLDP) Just Reported And Analysts Have Been Cutting Their Estimates

Ballard Power Systems Inc. (TSE:BLDP) missed earnings with its latest full-year results, disappointing overly-optimistic forecasters. Ballard Power Systems missed analyst estimates, with revenues of US$70m and a statutory loss per share (eps) of US$1.08 falling 7.4% and 3.3% below expectations, respectively. 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.

View our latest analysis for Ballard Power Systems

Taking into account the latest results, the most recent consensus for Ballard Power Systems from 15 analysts is for revenues of US$97.0m in 2025. If met, it would imply a major 39% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 63% to US$0.40. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$107.5m and losses of US$0.39 per share in 2025.

The analysts have cut their price target 9.5% to CA$1.96per share, signalling that the declining revenue and ongoing losses are contributing to the lower valuation. 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 Ballard Power Systems analyst has a price target of CA$2.89 per share, while the most pessimistic values it at CA$1.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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. One thing stands out from these estimates, which is that Ballard Power Systems is forecast to grow faster in the future than it has in the past, with revenues expected to display 39% annualised growth until the end of 2025. If achieved, this would be a much better result than the 5.9% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 20% per year. So it looks like Ballard Power Systems is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. 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 fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Ballard Power Systems' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Ballard Power Systems going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Ballard Power Systems you should know about.

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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.