Yahoo Finance Earnings Miss: Daqo New Energy Corp. Missed EPS By 57% And Analysts Are Revising Their Forecasts
The analysts might have been a bit too bullish on Daqo New Energy Corp. (NYSE:DQ), given that the company fell short of expectations when it released its quarterly results last week. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of US$415m missed by 16%, and statutory earnings per share of US$0.24 fell short of forecasts by 57%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Daqo New Energy
Following last week's earnings report, Daqo New Energy's eight analysts are forecasting 2024 revenues to be US$2.00b, approximately in line with the last 12 months. Statutory earnings per share are forecast to crater 69% to US$0.79 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$2.43b and earnings per share (EPS) of US$3.73 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a large cut to earnings per share numbers as well.
Despite the cuts to forecast earnings, there was no real change to the US$29.45 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Daqo New Energy at US$45.00 per share, while the most bearish prices it at US$18.70. 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.
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 1.1% annualised decline to the end of 2024. That is a notable change from historical growth of 42% 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 17% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Daqo New Energy 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 Daqo New Energy. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Daqo New Energy going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for Daqo New Energy that you need to take into consideration.
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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.
