Earnings Update: SMA Solar Technology AG (ETR:S92) Just Reported Its Annual Results And Analysts Are Updating Their Forecasts

A week ago, SMA Solar Technology AG (ETR:S92) came out with a strong set of yearly numbers that could potentially lead to a re-rate of the stock. Results were good overall, with revenues beating analyst predictions by 2.3% to hit €1.9b. Statutory earnings per share (EPS) came in at €6.50, some 3.5% above whatthe analysts had 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.

View our latest analysis for SMA Solar Technology

Taking into account the latest results, the current consensus from SMA Solar Technology's six analysts is for revenues of €1.99b in 2024. This would reflect a reasonable 4.7% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to dive 30% to €4.54 in the same period. Before this earnings report, the analysts had been forecasting revenues of €1.99b and earnings per share (EPS) of €4.15 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at €66.33, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. Currently, the most bullish analyst values SMA Solar Technology at €76.00 per share, while the most bearish prices it at €60.00. This is a very narrow spread of estimates, implying either that SMA Solar Technology is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. We would highlight that SMA Solar Technology's revenue growth is expected to slow, with the forecast 4.7% annualised growth rate until the end of 2024 being well below the historical 14% p.a. growth over the last 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. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than SMA Solar Technology.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around SMA Solar Technology's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that SMA Solar Technology's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for SMA Solar Technology going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for SMA Solar Technology (2 can't be ignored!) that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.