It’s been a good week for Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN) shareholders, because the company has just released its latest first-quarter results, and the shares gained 3.9% to US$12.90. The results were mixed overall, with revenues slightly ahead of analyst estimates at US$223m. Statutory losses by contrast were 6.1% larger than predictions at US$1.45 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for Maxeon Solar Technologies from five analysts is for revenues of US$1.13b in 2022 which, if met, would be a substantial 35% increase on its sales over the past 12 months. Losses are expected to be contained, narrowing 14% from last year to US$5.31. Before this earnings announcement, the analysts had been modelling revenues of US$1.21b and losses of US$4.20 per share in 2022. While this year’s revenue estimates dropped 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 12% to US$13.60, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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. Currently, the most bullish analyst values Maxeon Solar Technologies at US$18.00 per share, while the most bearish prices it at US$8.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Maxeon Solar Technologies’ past performance and to peers in the same industry. The analysts are definitely expecting Maxeon Solar Technologies’ growth to accelerate, with the forecast 49% annualised growth to the end of 2022 ranking favourably alongside historical growth of 7.4% per annum over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.9% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Maxeon Solar Technologies 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 Maxeon Solar Technologies. They also downgraded their revenue estimates, although industry data suggests that Maxeon Solar Technologies’ revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Maxeon Solar Technologies’ future valuation.
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 Maxeon Solar Technologies analysts – going out to 2024, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for Maxeon Solar Technologies (1 can’t be ignored!) that we have uncovered.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.