Here’s What Analysts Think Will Happen Next

Shareholders might have noticed that Polaris Renewable Energy Inc. (TSE:PIF) filed its second-quarter result this time last week. The early response was not positive, with shares down 4.5% to CA$12.38 in the past week. Revenues of US$19m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.05, missing estimates by 9.1%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Polaris Renewable Energy

Following last week’s earnings report, Polaris Renewable Energy’s five analysts are forecasting 2024 revenues to be US$78.2m, approximately in line with the last 12 months. Per-share earnings are expected to grow 20% is US$0.44. In the lead-up to this report, the analysts had been modeling revenues of US$78.0m and earnings per share (EPS) of US$0.46 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at CA$20.77, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values ​​Polaris Renewable Energy at CA$22.03 per share, while the most bearish prices it at CA$19.02. The narrow spread of estimates could suggest that the business’ future is relatively easy to value, or that the analysts have a strong view on its prospects.

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 Polaris Renewable Energy’s rate of growth is expected to accelerate meaningfully, with the forecast 3.3% annualized revenue growth to the end of 2024 noticeably faster than its historical growth of 0.4% pa over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 4.4% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Polaris Renewable Energy is expected to grow slower than the wider industry.

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The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates – from multiple Polaris Renewable Energy analysts – going out to 2025, and you can see them free on our platform here.

You still need to take note of risks, for example – Polaris Renewable Energy has 3 warning signs (and 1 which is a bit unpleasant) we think you should know about.

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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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