Bearish: Analysts Just Cut Their FTC Solar, Inc. (NASDAQ:FTCI) Revenue and EPS estimates

The analysts covering FTC Solar, Inc. (NASDAQ:FTCI) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After this downgrade, FTC Solar's eight analysts are now forecasting revenues of US$197m in 2023. This would be a substantial 70% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 39% to US$0.35 per share. However, before this estimates update, the consensus had been expecting revenues of US$254m and US$0.28 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for FTC Solar

The consensus price target fell 5.8% to US$4.48, implicitly signalling that lower earnings per share are a leading indicator for FTC Solar's valuation.

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. One thing stands out from these estimates, which is that FTC Solar is forecast to grow faster in the future than it has in the past, with revenues expected to display 189% annualised growth until the end of 2023. If achieved, this would be a much better result than the 51% annual decline over the past year. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 7.7% per year. Not only are FTC Solar's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of FTC Solar.

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

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.