Analysts Just Shaved Their Heliogen, Inc. (NYSE:HLGN) Forecasts Dramatically

Market forces rained on the parade of Heliogen, Inc. (NYSE:HLGN) shareholders today, when the analysts downgraded their forecasts for next year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the most recent consensus for Heliogen from its two analysts is for revenues of US$94m in 2023 which, if met, would be a substantial increase on its sales over the past 12 months. The loss per share is expected to ameliorate slightly, reducing to US$0.75. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$111m and losses of US$0.63 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Check out our latest analysis for Heliogen

The consensus price target fell 42% to US$2.50, implicitly signalling that lower earnings per share are a leading indicator for Heliogen's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Heliogen at US$3.00 per share, while the most bearish prices it at US$2.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Heliogen shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Heliogen's growth to accelerate, with the forecast 3x annualised growth to the end of 2023 ranking favourably alongside historical growth of 104% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Heliogen is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for next year. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Heliogen.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Heliogen, including 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.