Analysts Just Shaved Their Array Technologies, Inc. (NASDAQ:ARRY) Forecasts Dramatically

The latest analyst coverage could presage a bad day for Array Technologies, Inc. (NASDAQ:ARRY), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from 25 analysts covering Array Technologies is for revenues of US$1.0b in 2024, implying a perceptible 5.4% decline in sales compared to the last 12 months. Per-share earnings are expected to leap 181% to US$0.31. Prior to this update, the analysts had been forecasting revenues of US$1.1b and earnings per share (EPS) of US$0.34 in 2024. The forecasts seem less optimistic after the new consensus numbers, with lower sales estimates and making a considerable drop in earnings per share forecasts.

View our latest analysis for Array Technologies

Despite the cuts to forecast earnings, there was no real change to the US$13.67 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 11% by the end of 2024. This indicates a significant reduction from annual growth of 19% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Array Technologies is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Array Technologies. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Array Technologies' revenues are expected to grow slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Array Technologies.

Unfortunately, the earnings downgrade - if accurate - may also place pressure on Array Technologies' mountain of debt, which could lead to some belt tightening for shareholders. See why we're concerned about Array Technologies' balance sheet by visiting our risks dashboard for free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.