NN, Inc. (NASDAQ:NNBR) Just Reported, And Analysts Assigned A US$3.50 Price Target

The analysts might have been a bit too bullish on NN, Inc. (NASDAQ:NNBR), given that the company fell short of expectations when it released its quarterly results last week. It was a pretty negative result overall, with revenues of US$127m missing analyst predictions by 3.0%. Worse, the business reported a statutory loss of US$0.29 per share, much larger than the analysts had forecast prior to the result. 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.

View our latest analysis for NN

Taking into account the latest results, the consensus forecast from NN's three analysts is for revenues of US$532.5m in 2023, which would reflect a satisfactory 7.0% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 29% to US$0.71. Before this latest report, the consensus had been expecting revenues of US$532.5m and US$0.71 per share in losses.

The analysts trimmed their valuations, with the average price target falling 22% to US$3.50, with the ongoing losses seemingly weighing on sentiment, despite no real changes to the earnings forecasts. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic NN analyst has a price target of US$5.00 per share, while the most pessimistic values it at US$4.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that NN's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 9.4% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 8.2% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.8% annually. Not only are NN'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 obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to 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 estimates - from multiple NN analysts - going out to 2025, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for NN that you should be aware 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.