SMA Solar Technology AG (ETR:S92) has just published its latest quarterly results and things are looking bullish. Revenues beat expectations by 4.6% to €398m, making it a strong result overall. SMA Solar Technology also reported a statutory profit of €0.45, beating the analysts' forecasts by 96%. Following these results, the analysts have updated their earnings model, but it would be useful to know whether they think there has been a material change to the company's outlook or if it is business as usual. We remind readers that we have compiled the latest statutory forecasts to see whether the analysts have changed their mind on SMA Solar Technology following the latest results.
View our latest analysis for SMA Solar Technology
XTRA:S92 Revenue and Sales Growth August 11, 2024
Following the recent earnings report, the consensus of the 6 analysts covering SMA Solar Technology is for revenues of €1.63b in 2024. This would mean a significant 13% drop in revenues compared to the last 12 months. Statutory earnings per share are forecast to fall 70% to €1.42 within the same period. Prior to this earnings report, the analysts had been forecasting revenues of €1.64b and earnings per share (EPS) of €1.34 in 2024. It appears that the analysts are becoming more bullish on the business judging by the new earnings per share forecasts.
The consensus price target remained unchanged at €31.67, suggesting that the improved earnings outlook is not expected to have a long-term impact on shareholder value creation. However, there is another way to look at price targets – by looking at the range of price targets offered by analysts, since a wide range of forecasts can suggest diverse views on the possible outcomes of the business. There are differing perceptions on SMA Solar Technology, with the most bullish analyst valuing it at €40.00 per share and the most bearish at €27.00. Analysts undoubtedly have a range of views on the business, but in our view, the difference in forecasts is not large enough to suggest that extreme outcomes could be in store for SMA Solar Technology shareholders.
Looking at the bigger picture, one way to understand these forecasts is to see how they compare to both past performance and industry growth forecasts. These forecasts predict that revenue will slow, declining at 25% per year by the end of 2024. This represents a significant decrease from the 16% annual growth rate over the past five years. Comparing this to our data, other companies in the same industry are expected to see their revenue grow at a combined 8.6% per year. It's clear that SMA Solar Technology's revenue is expected to perform significantly worse than the industry as a whole.
Conclusion
The biggest takeaway for us is the upgrade to the consensus earnings per share estimate, suggesting that sentiment around SMA Solar Technology's earnings potential next year is clearly improving. Fortunately, the analysts also reaffirmed their revenue forecasts, suggesting they are moving in line with expectations. However, our data shows that SMA Solar Technology's earnings are expected to perform worse than the wider industry. The consensus price estimate remains stable at €31.67, with the latest forecasts not enough to impact the price target.
With that in mind, we probably shouldn't jump to any premature conclusions about SMA Solar Technology. Its long-term earnings strength is much more important than next year's profits. We have forecasts for SMA Solar Technology out to 2026, and you can see them free of charge on our platform.
We don't want to be too disappointing, but we've also found 3 warning signs for SMA Solar Technology that you should be aware of (2 are a bit unpleasant) .
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This article by Simply Wall St is of general nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell a stock, and does not take into account your objectives or financial situation. We aim to provide long-term analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned herein.
