Earnings Beat: SMA Solar Technology AG Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a pretty great week for SMA Solar Technology AG (ETR:S92) shareholders, with its shares surging 15% to €18.57 in the week since its latest quarterly results. Revenues of €328m reported a marginal miss, falling short of forecasts by 7.7%, but earnings were better than expected - statutory profits came in at €0.16 per share, a nice change from the loss the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following the latest results, SMA Solar Technology's five analysts are now forecasting revenues of €1.53b in 2025. This would be an okay 2.4% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with SMA Solar Technology forecast to report a statutory profit of €0.36 per share. In the lead-up to this report, the analysts had been modelling revenues of €1.53b and earnings per share (EPS) of €0.38 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

Check out our latest analysis for SMA Solar Technology

The consensus price target held steady at €17.20, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 SMA Solar Technology, with the most bullish analyst valuing it at €22.00 and the most bearish at €15.00 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that SMA Solar Technology's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.2% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that SMA Solar Technology is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for SMA Solar Technology. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at €17.20, 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 SMA Solar Technology. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple SMA Solar Technology analysts - going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for SMA Solar Technology that you need to take into consideration.

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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.