FTC Solar, Inc. (NASDAQ:FTCI) Analysts Just Slashed This Year's Estimates

Market forces rained on the parade of FTC Solar, Inc. (NASDAQ:FTCI) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the seven analysts covering FTC Solar are now predicting revenues of US$147m in 2024. If met, this would reflect a meaningful 16% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 35% to US$0.26 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$232m and losses of US$0.21 per share in 2024. 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.

See our latest analysis for FTC Solar

The consensus price target fell 30% to US$0.91, implicitly signalling that lower earnings per share are a leading indicator for FTC Solar's valuation.

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. 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 16% annualised growth until the end of 2024. If achieved, this would be a much better result than the 22% annual decline over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.2% annually. So it looks like FTC Solar is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at FTC Solar. 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.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple FTC Solar analysts - going out to 2026, 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.