Energy Vault Holdings, Inc. (NYSE:NRGV) Just Reported And Analysts Have Been Cutting Their Estimates

There's been a notable change in appetite for Energy Vault Holdings, Inc. (NYSE:NRGV) shares in the week since its yearly report, with the stock down 12% to US$2.87. The results were mixed overall, with revenues slightly ahead of analyst estimates at US$146m. Statutory losses by contrast were 5.3% larger than predictions at US$0.64 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Energy Vault Holdings

After the latest results, the six analysts covering Energy Vault Holdings are now predicting revenues of US$384.8m in 2023. If met, this would reflect a major 164% improvement in sales compared to the last 12 months. Losses are supposed to decline, shrinking 19% from last year to US$0.46. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$564.8m and losses of US$0.46 per share in 2023. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to next year's revenue estimates, while at the same time holding losses per share steady.

The average price target fell 15% to US$7.40, with the analysts clearly concerned about the weaker revenue outlook and expectation of ongoing losses. 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$12.00 per share, while the most bearish prices it at US$2.50. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Energy Vault Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 164% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 131% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Energy Vault Holdings is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. They also downgraded their revenue estimates, although industry data suggests that Energy Vault Holdings' revenues are 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 Energy Vault Holdings' 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 forecasts for Energy Vault Holdings going out to 2025, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Energy Vault Holdings you should be aware of, and 1 of them makes us a bit uncomfortable.

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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.