Results: Broadwind, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

It's been a mediocre week for Broadwind, Inc. (NASDAQ:BWEN) shareholders, with the stock dropping 17% to US$2.21 in the week since its latest quarterly results. Revenues of US$36m fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of US$0.02 an impressive 501% ahead of estimates. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Broadwind

After the latest results, the consensus from Broadwind's three analysts is for revenues of US$148.6m in 2024, which would reflect a definite 16% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to tumble 87% to US$0.045 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$153.0m and earnings per share (EPS) of US$0.093 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 6.3% to US$5.63. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Broadwind analyst has a price target of US$8.00 per share, while the most pessimistic values it at US$3.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 30% by the end of 2024. This indicates a significant reduction from annual growth of 1.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.0% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Broadwind is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Broadwind. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Broadwind's future valuation.

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 Broadwind going out to 2025, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 4 warning signs for Broadwind (1 is significant!) that you need to be mindful of.

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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.