The analysts might have been a bit too bullish on Ballard Power Systems Inc. (TSE:BLDP), given that the company fell short of expectations when it released its quarterly results last week. It was a pretty negative result overall, with revenues of US$24m missing analyst predictions by 9.1%. Worse, the business reported a statutory loss of US$0.06 per share, much larger than the analysts had forecast prior to the result. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ballard Power Systems after the latest results.
Taking into account the latest results, the current consensus from Ballard Power Systems' five analysts is for revenues of US$121.0m in 2020, which would reflect a satisfactory 5.9% increase on its sales over the past 12 months. Losses are expected to hold steady at around US$0.17. Before this latest report, the consensus had been expecting revenues of US$131.1m and US$0.14 per share in losses. So it's pretty clear the analysts have mixed opinions on Ballard Power Systems after this update; revenues were downgraded and per-share losses expected to increase.
There was no major change to the consensus price target of US$12.85, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Ballard Power Systems' revenue growth is expected to slow, with forecast 5.9% increase next year well below the historical 12%p.a. growth over the last five years. Compare this to the 6 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.4% per year. So it's pretty clear that, while Ballard Power Systems' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Sadly, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target held steady at US$12.85, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Ballard Power Systems analysts - going out to 2024, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 3 warning signs for Ballard Power Systems you should be aware of.
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