Newsflash: Advanced Energy Industries, Inc. (NASDAQ:AEIS) Analysts Have Been Trimming Their Revenue Forecasts

The analysts covering Advanced Energy Industries, Inc. (NASDAQ:AEIS) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the nine analysts covering Advanced Energy Industries provided consensus estimates of US$1.5b revenue in 2024, which would reflect an uneasy 9.3% decline on its sales over the past 12 months. Statutory earnings per share are supposed to nosedive 35% to US$2.29 in the same period. Prior to this update, the analysts had been forecasting revenues of US$1.7b and earnings per share (EPS) of US$3.79 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Advanced Energy Industries

Analysts made no major changes to their price target of US$108, suggesting the downgrades are not expected to have a long-term impact on Advanced Energy Industries' valuation.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue 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 5.2% 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 most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Advanced Energy Industries after today.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Advanced Energy Industries going out to 2025, and you can see them 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.

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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.