One Pioneer Power Solutions, Inc. (NASDAQ:PPSI) Analyst Just Slashed Their Estimates By A Notable 12%

Market forces rained on the parade of Pioneer Power Solutions, Inc. (NASDAQ:PPSI) shareholders today, when the covering analyst downgraded their forecasts for next year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the most recent consensus for Pioneer Power Solutions from its lone analyst is for revenues of US$63m in 2024 which, if met, would be a major 47% increase on its sales over the past 12 months. Per-share earnings are expected to surge 141% to US$0.43. Prior to this update, the analyst had been forecasting revenues of US$71m and earnings per share (EPS) of US$0.45 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a substantial drop in revenue estimates and a minor downgrade to earnings per share numbers as well.

View our latest analysis for Pioneer Power Solutions

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Pioneer Power Solutions' rate of growth is expected to accelerate meaningfully, with the forecast 36% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 4.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Pioneer Power Solutions is expected to grow much faster than its industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Pioneer Power Solutions. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Pioneer Power Solutions going forwards.

As you can see, the covering analyst clearly isn't bullish, and there might be good reason for that. We've identified some potential issues with Pioneer Power Solutions' financials, such as dilutive stock issuance over the past year. Learn more, and discover the 2 other concerns we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.