Analysts Have Made A Financial Statement On TPI Composites, Inc.'s (NASDAQ:TPIC) First-Quarter Report

TPI Composites, Inc. (NASDAQ:TPIC) just released its latest first-quarter report and things are not looking great. Revenues missed expectations somewhat, coming in at US$299m, but statutory earnings fell catastrophically short, with a loss of US$1.30 some 83% larger than what the analysts had predicted. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for TPI Composites

Following last week's earnings report, TPI Composites' 13 analysts are forecasting 2024 revenues to be US$1.36b, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 52% to US$2.07. Before this earnings announcement, the analysts had been modelling revenues of US$1.36b and losses of US$1.47 per share in 2024. While this year's revenue estimates held steady, there was also a very substantial increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

As a result, there was no major change to the consensus price target of US$4.71, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on TPI Composites, with the most bullish analyst valuing it at US$8.00 and the most bearish at US$2.50 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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 TPI Composites' revenue growth is expected to slow, with the forecast 0.9% annualised growth rate until the end of 2024 being well below the historical 2.5% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.7% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than TPI Composites.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at TPI Composites. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that TPI Composites' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on TPI Composites. Long-term earnings power is much more important than next year's profits. We have forecasts for TPI Composites going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with TPI Composites (including 1 which doesn't sit too well with us) .

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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.