Yahoo Finance Earnings Release: Here's Why Analysts Cut Their NuScale Power Corporation (NYSE:SMR) Price Target To US$13.50
NuScale Power Corporation (NYSE:SMR) just released its latest quarterly report and things are not looking great. It was not a great statutory result, with revenues coming in 62% lower than the analysts predicted. Unsurprisingly, earnings also fell seriously short of forecasts, turning into a per-share loss of US$0.16. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for NuScale Power
Taking into account the latest results, the most recent consensus for NuScale Power from four analysts is for revenues of US$100.7m in 2023 which, if met, would be a major 577% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$0.50 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$99.6m and losses of US$0.41 per share in 2023. While this year's revenue estimates held steady, there was also a sizeable expansion in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The consensus price target fell 11% to US$13.50per share, with the analysts clearly concerned by ballooning losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on NuScale Power, with the most bullish analyst valuing it at US$18.00 and the most bearish at US$9.00 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.
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. The analysts are definitely expecting NuScale Power's growth to accelerate, with the forecast 12x annualised growth to the end of 2023 ranking favourably alongside historical growth of 220% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.5% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect NuScale Power to grow faster than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at NuScale Power. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on NuScale Power. 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 NuScale Power going out to 2025, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 4 warning signs for NuScale Power you should be aware of, and 1 of them is a bit unpleasant.
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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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