Shareholders might have noticed that Advanced Energy Industries, Inc. (NASDAQ:AEIS) filed its yearly result this time last week. The early response was not positive, with shares down 4.8% to US$101 in the past week. The result was positive overall - although revenues of US$1.7b were in line with what the analysts predicted, Advanced Energy Industries surprised by delivering a statutory profit of US$3.40 per share, modestly greater than 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Advanced Energy Industries after the latest results.
Taking into account the latest results, the current consensus, from the nine analysts covering Advanced Energy Industries, is for revenues of US$1.50b in 2024. This implies a considerable 9.3% reduction in Advanced Energy Industries' revenue over the past 12 months. Statutory earnings per share are forecast to plummet 35% to US$2.29 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.71b and earnings per share (EPS) of US$3.79 in 2024. Indeed, we can see that the analysts are a lot more bearish about Advanced Energy Industries' prospects following the latest results, administering a real cut to revenue estimates and slashing their EPS estimates to boot.
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. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Advanced Energy Industries analyst has a price target of US$130 per share, while the most pessimistic values 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Advanced Energy Industries' past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 9.3% annualised decline to the end of 2024. That is a notable change from historical 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. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Advanced Energy Industries is expected to lag 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Advanced Energy Industries. Long-term earnings power is much more important than next year's profits. 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..
We also provide an overview of the Advanced Energy Industries Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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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.