Advanced Energy Industries, Inc. Just Recorded A 5.9% EPS Beat: Here's What Analysts Are Forecasting Next

Advanced Energy Industries, Inc. (NASDAQ:AEIS) shareholders are probably feeling a little disappointed, since its shares fell 4.8% to US$101 in the week after its latest full-year results. Advanced Energy Industries reported US$1.7b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$3.40 beat expectations, being 5.9% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Advanced Energy Industries

Following the recent earnings report, the consensus from nine analysts covering Advanced Energy Industries is for revenues of US$1.50b in 2024. This implies a definite 9.3% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to crater 35% to US$2.29 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.71b and earnings per share (EPS) of US$3.79 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

Despite the cuts to forecast earnings, there was no real change to the US$108 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. Currently, the most bullish analyst values Advanced Energy Industries at US$130 per share, while the most bearish prices it at US$95.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 9.3% by the end of 2024. This indicates a significant reduction from annual growth of 20% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.3% per year. It's pretty clear that Advanced Energy Industries' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Advanced Energy Industries. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$108, with the latest estimates not enough to have an impact on their price targets.

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 Advanced Energy Industries going out to 2025, and you can see them free on our platform here.

You can also see our analysis of Advanced Energy Industries' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.