FTC Solar, Inc. (NASDAQ:FTCI) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

It's been a mediocre week for FTC Solar, Inc. (NASDAQ:FTCI) shareholders, with the stock dropping 13% to US$0.44 in the week since its latest annual results. The results look positive overall; while revenues of US$127m were in line with analyst predictions, statutory losses were 2.4% smaller than expected, with FTC Solar losing US$0.44 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. 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 consensus forecast from FTC Solar's seven analysts is for revenues of US$146.9m in 2024. This reflects a notable 16% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 41% to US$0.26. Before this earnings announcement, the analysts had been modelling revenues of US$231.5m and losses of US$0.21 per share in 2024. 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 30% to US$0.91, 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. There are some variant perceptions on FTC Solar, with the most bullish analyst valuing it at US$2.00 and the most bearish at US$0.20 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. 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.

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. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 8.2% per year. 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 is the forecast of increased losses next year, suggesting all may not be well at FTC Solar. 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.

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. We have estimates - from multiple FTC Solar analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that FTC Solar is showing 4 warning signs in our investment analysis , you should know about...

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.