Today is shaping up negative for Advanced Energy Industries, Inc. (NASDAQ:AEIS) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the current consensus, from the nine analysts covering Advanced Energy Industries, is for revenues of US$1.5b in 2024, which would reflect a definite 9.3% reduction in Advanced Energy Industries' sales over the past 12 months. Statutory earnings per share are anticipated to plunge 35% to US$2.29 in the same period. Prior to this update, the analysts had been forecasting revenues of US$1.7b and earnings per share (EPS) of US$3.79 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

Analysts made no major changes to their price target of US$108, suggesting the downgrades are not expected to have a long-term impact on Advanced Energy Industries' valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 9.3% by the end of 2024. This indicates a significant reduction from annual growth of 20% 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 5.2% per year. It's pretty clear that Advanced Energy Industries' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Advanced Energy Industries. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Advanced Energy Industries after today.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Advanced Energy Industries going out to 2025, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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