Shareholders might have noticed that ADTRAN Holdings, Inc. (NASDAQ:ADTN) filed its full-year result this time last week. The early response was not positive, with shares down 7.8% to US$5.69 in the past week. It was a pretty bad result overall; while revenues were in line with expectations at US$1.1b, statutory losses exploded to US$3.41 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the recent earnings report, the consensus from five analysts covering ADTRAN Holdings is for revenues of US$1.03b in 2024. This implies a not inconsiderable 9.9% decline in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 85% to US$0.52. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.06b and losses of US$0.28 per share in 2024. While this year's revenue estimates dropped there was also a massive increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The average price target lifted 11% to US$9.60, clearly signalling that the weaker revenue and EPS outlook are not expected to weigh on the stock over the longer term. 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. Currently, the most bullish analyst values ADTRAN Holdings at US$14.00 per share, while the most bearish prices it at US$7.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 9.9% annualised decline to the end of 2024. That is a notable change from historical growth of 21% 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 3.6% per year. It's pretty clear that ADTRAN Holdings' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on ADTRAN Holdings. 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 ADTRAN Holdings going out to 2026, and you can see them free on our platform here..
Before you take the next step you should know about the 1 warning sign for ADTRAN Holdings that we have uncovered.
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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.