Analyst Estimates: Here's What Brokers Think Of Ceres Power Holdings plc (LON:CWR) After Its Half-Yearly Report

Last week, you might have seen that Ceres Power Holdings plc (LON:CWR) released its half-yearly result to the market. The early response was not positive, with shares down 6.0% to UK£3.14 in the past week. The 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ceres Power Holdings after the latest results.

Check out our latest analysis for Ceres Power Holdings

Taking into account the latest results, the current consensus from Ceres Power Holdings' ten analysts is for revenues of UK£32.5m in 2023. This would reflect a substantial 37% increase on its revenue over the past 12 months. Losses are supposed to decline, shrinking 10% from last year to UK£0.23. Yet prior to the latest earnings, the analysts had been forecasting revenues of UK£33.8m and losses of UK£0.18 per share in 2023. So it's pretty clear the analysts have mixed opinions on Ceres Power Holdings after this update; revenues were downgraded and per-share losses expected to increase.

The average price target was broadly unchanged at UK£7.18, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the 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. There are some variant perceptions on Ceres Power Holdings, with the most bullish analyst valuing it at UK£10.35 and the most bearish at UK£4.40 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Ceres Power Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 87% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 17% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 20% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Ceres Power Holdings 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 Ceres Power Holdings. They also downgraded Ceres Power Holdings' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at UK£7.18, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Ceres Power Holdings going out to 2025, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Ceres Power Holdings 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.