New Forecasts: Here's What Analysts Think The Future Holds For Sunnova Energy International Inc. (NYSE:NOVA)

Sunnova Energy International Inc. (NYSE:NOVA) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance. The stock price has risen 5.3% to US$17.78 over the past week, suggesting investors are becoming more optimistic. Could this big upgrade push the stock even higher?

Following the upgrade, the most recent consensus for Sunnova Energy International from its 21 analysts is for revenues of US$771m in 2023 which, if met, would be a substantial 38% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 37% to US$0.88. However, before this estimates update, the consensus had been expecting revenues of US$692m and US$1.01 per share in losses. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

See our latest analysis for Sunnova Energy International

Despite these upgrades, the analysts have not made any major changes to their price target of US$35.91, implying that their latest estimates don't have a long term impact on what they think the stock is worth. 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. The most optimistic Sunnova Energy International analyst has a price target of US$60.00 per share, while the most pessimistic values it at US$23.00. 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.

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. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 38% growth on an annualised basis. That is in line with its 37% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 8.3% per year. So it's pretty clear that Sunnova Energy International is forecast to grow substantially faster than its industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Sunnova Energy International is moving incrementally towards profitability. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Sunnova Energy International could be a good candidate for more research.

Analysts are definitely bullish on Sunnova Energy International, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including a short cash runway. You can learn more, and discover the 1 other flag 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.