Ceres Power Holdings plc (LON:CWR) Yearly Results: Here's What Analysts Are Forecasting For This Year

Investors in Ceres Power Holdings plc (LON:CWR) had a good week, as its shares rose 9.3% to close at UK£1.45 following the release of its annual results. The results were mixed overall, with revenues slightly ahead of analyst estimates at UK£22m. Statutory losses by contrast were 6.7% larger than predictions at UK£0.28 per share. 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. 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 Ceres Power Holdings

Taking into account the latest results, the consensus forecast from Ceres Power Holdings' 14 analysts is for revenues of UK£49.0m in 2024. This reflects a major 120% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 28% to UK£0.20. Yet prior to the latest earnings, the analysts had been forecasting revenues of UK£50.5m and losses of UK£0.20 per share in 2024. Overall it looks as though the analysts are negative in this update. Although revenue forecasts held steady, the consensus also made a pronounced increase to to its losses per share forecasts.

There was no major change to the consensus price target of UK£3.96, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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 Ceres Power Holdings analyst has a price target of UK£7.65 per share, while the most pessimistic values it at UK£1.25. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Ceres Power Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 120% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 9.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Ceres Power Holdings is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts increased 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 held steady at UK£3.96, 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 Ceres Power Holdings. 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 Ceres Power Holdings going out to 2026, and you can see them free on our platform here..

Even so, be aware that Ceres Power Holdings is showing 2 warning signs in our investment analysis , 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.