Earnings Update: FTC Solar, Inc. (NASDAQ:FTCI) Just Reported And Analysts Are Trimming Their Forecasts

It's shaping up to be a tough period for FTC Solar, Inc. (NASDAQ:FTCI), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. It definitely looks like a negative result overall with revenues falling 19% short of analyst estimates at US$50m. Statutory losses were US$0.28 per share, 122% bigger than what the analysts expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on FTC Solar after the latest results.

See our latest analysis for FTC Solar

Taking into account the latest results, the most recent consensus for FTC Solar from seven analysts is for revenues of US$335.0m in 2022 which, if met, would be a substantial 32% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 48% to US$0.66. Before this latest report, the consensus had been expecting revenues of US$417.6m and US$0.11 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.

The consensus price target fell 24% to US$5.21, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic FTC Solar analyst has a price target of US$8.00 per share, while the most pessimistic values it at US$2.00. 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.

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. The analysts are definitely expecting FTC Solar's growth to accelerate, with the forecast 44% annualised growth to the end of 2022 ranking favourably alongside historical growth of 15% per annum over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that FTC Solar 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. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for FTC Solar going out to 2024, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for FTC Solar that you need to take into consideration.

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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.