Tigo Energy, Inc. (NASDAQ:TYGO) Just Reported And Analysts Have Been Cutting Their Estimates

The analysts might have been a bit too bullish on Tigo Energy, Inc. (NASDAQ:TYGO), given that the company fell short of expectations when it released its second-quarter results last week. It was a pretty negative result overall, with revenues of US$13m missing analyst predictions by 8.3%. Additionally, the business reported a statutory loss of US$0.19 per share, larger than the analysts had forecast prior to the result. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Tigo Energy

Taking into account the latest results, the current consensus from Tigo Energy's three analysts is for revenues of US$54.8m in 2024. This would reflect a solid 12% increase on its revenue over the past 12 months. Losses are forecast to balloon 304% to US$0.70 per share. Before this latest report, the consensus had been expecting revenues of US$77.2m and US$0.56 per share in losses. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

The average price target fell 7.2% to US$3.67, implicitly signalling that lower earnings per share are a leading indicator for Tigo Energy's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Tigo Energy at US$4.50 per share, while the most bearish prices it at US$3.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. One thing stands out from these estimates, which is that Tigo Energy is forecast to grow faster in the future than it has in the past, with revenues expected to display 26% annualised growth until the end of 2024. If achieved, this would be a much better result than the 72% annual decline over the past year. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 7.9% annually. Not only are Tigo Energy'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 important thing to note is the forecast of increased losses next year, suggesting all may not be well at Tigo Energy. 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 forecasts for Tigo Energy going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 5 warning signs for Tigo Energy (1 is a bit unpleasant) 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.