Array Technologies, Inc. (NASDAQ:ARRY) just released its latest quarterly results and things are looking bullish. The company beat forecasts, with revenue of US$256m, some 9.2% above estimates, and statutory earnings per share (EPS) coming in at US$0.08, 246% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

After the latest results, the 25 analysts covering Array Technologies are now predicting revenues of US$1.13b in 2024. If met, this would reflect a modest 2.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 233% to US$0.36. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.32b and earnings per share (EPS) of US$0.66 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a pretty serious reduction to earnings per share numbers as well.

The consensus price target fell 19% to US$14.41, with the weaker earnings outlook clearly leading valuation estimates. 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. There are some variant perceptions on Array Technologies, with the most bullish analyst valuing it at US$23.00 and the most bearish at US$8.00 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Array Technologies' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Array Technologies' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.2% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.0% annually. Factoring in the forecast slowdown in growth, it seems obvious that Array Technologies is also expected to grow slower than other industry participants.

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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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 Array Technologies. 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 Array Technologies going out to 2026, 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 Array Technologies you should be aware of.

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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.