Yahoo Finance These Analysts Think Eos Energy Enterprises, Inc.'s (NASDAQ:EOSE) Sales Are Under Threat
One thing we could say about the analysts on Eos Energy Enterprises, Inc. (NASDAQ:EOSE) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the downgrade, the current consensus from Eos Energy Enterprises' six analysts is for revenues of US$153m in 2023 which - if met - would reflect a sizeable increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 43% to US$1.89. Yet before this consensus update, the analysts had been forecasting revenues of US$195m and losses of US$1.74 per share in 2023. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.
Check out our latest analysis for Eos Energy Enterprises
The consensus price target fell 37% to US$4.10, implicitly signalling that lower earnings per share are a leading indicator for Eos Energy Enterprises' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Eos Energy Enterprises, with the most bullish analyst valuing it at US$6.00 and the most bearish at US$3.50 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Eos Energy Enterprises' rate of growth is expected to accelerate meaningfully, with the forecast 4x annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 135% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Eos Energy Enterprises to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Eos Energy Enterprises' future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Eos Energy Enterprises after today.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Eos Energy Enterprises, including dilutive stock issuance over the past year. For more information, you can click here to discover this and the 4 other flags we've identified.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks 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.
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