Stock Analysis

Analysts Have Been Trimming Their Titan Machinery Inc. (NASDAQ:TITN) Price Target After Its Latest Report

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Last week, you might have seen that Titan Machinery Inc. (NASDAQ:TITN) released its full-year result to the market. The early response was not positive, with shares down 7.9% to US$23.55 in the past week. Results overall were respectable, with statutory earnings of US$4.93 per share roughly in line with what the analysts had forecast. Revenues of US$2.8b came in 4.4% ahead of analyst predictions. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Titan Machinery

NasdaqGS:TITN Earnings and Revenue Growth March 23rd 2024

Taking into account the latest results, the current consensus from Titan Machinery's six analysts is for revenues of US$3.00b in 2025. This would reflect a solid 8.8% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to plummet 35% to US$3.24 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$2.75b and earnings per share (EPS) of US$4.38 in 2025. So it's pretty clear the analysts have mixed opinions on Titan Machinery after the latest results; even though they upped their revenue numbers, it came at the cost of a large cut to per-share earnings expectations.

The consensus price target fell 15% to US$31.80, suggesting that the analysts are primarily focused on earnings as the driver of value for this business. 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. Currently, the most bullish analyst values Titan Machinery at US$40.00 per share, while the most bearish prices it at US$24.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. We would highlight that Titan Machinery's revenue growth is expected to slow, with the forecast 8.8% annualised growth rate until the end of 2025 being well below the historical 17% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.6% annually. Even after the forecast slowdown in growth, it seems obvious that Titan Machinery is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Titan Machinery's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Titan Machinery analysts - going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Titan Machinery you should know about.

Valuation is complex, but we're helping make it simple.

Find out whether Titan Machinery is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.