Market forces rained on the parade of Energy Vault Holdings, Inc. (NYSE:NRGV) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. Bidders are definitely seeing a different story, with the stock price of US$5.30 reflecting a 29% rise in the past week. With such a sharp increase, it seems brokers may have seen something that is not yet being priced in by the wider market.
After this downgrade, Energy Vault Holdings' five analysts are now forecasting revenues of US$97m in 2022. This would be a major 122% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$0.58 per share. However, before this estimates update, the consensus had been expecting revenues of US$141m and US$0.51 per share in losses. 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.
The consensus price target fell 11% to US$12.70, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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 Energy Vault Holdings at US$19.00 per share, while the most bearish prices it at US$5.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Energy Vault Holdings.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Energy Vault Holdings, including major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 1 other concern we've identified.
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Energy Vault Holdings
Energy Vault Holdings, Inc. develops and sells energy storage solutions.
The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.
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Excellent balance sheet with high growth potential.