Results: Array Technologies, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

Array Technologies, Inc. (NASDAQ:ARRY) defied analyst predictions to release its second-quarter results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 9.2% to hit US$256m. Array Technologies also reported a statutory profit of US$0.08, which was an impressive 246% above what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Array Technologies

Taking into account the latest results, the consensus forecast from Array Technologies' 25 analysts is for revenues of US$1.13b in 2024. This reflects a satisfactory 2.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 233% to US$0.36. Before this earnings report, the analysts had been forecasting revenues of US$1.32b and earnings per share (EPS) of US$0.66 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a pretty serious reduction to earnings per share numbers as well.

It'll come as no surprise then, to learn that the analysts have cut their price target 19% to US$14.41. 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. Currently, the most bullish analyst values Array Technologies at US$23.00 per share, while the most bearish prices it at US$8.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Array Technologies' past performance and to peers in the same industry. We would highlight that Array Technologies' revenue growth is expected to slow, with the forecast 5.2% annualised growth rate until the end of 2024 being well below the historical 19% p.a. growth over the last three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.0% annually. Factoring in the forecast slowdown in growth, it seems obvious that Array Technologies 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 Array Technologies. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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. At Simply Wall St, we have a full range of analyst estimates for Array Technologies going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 3 warning signs for Array Technologies that we have uncovered.

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.