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ITM Power Plc (LON:ITM) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues of UK£17m arrived in line with expectations, although statutory losses per share were UK£0.044, an impressive 41% smaller than what broker models predicted. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for ITM Power
Following the latest results, ITM Power's 15 analysts are now forecasting revenues of UK£33.2m in 2025. This would be a substantial 101% improvement in revenue compared to the last 12 months. Per-share losses are expected to explode, reaching UK£0.064 per share. Before this earnings announcement, the analysts had been modelling revenues of UK£38.8m and losses of UK£0.065 per share in 2025. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year's revenue estimates, while at the same time reducing their loss estimates.
The consensus price target was broadly unchanged at UK£0.89, implying that the business is performing roughly in line with expectations, despite adjustments to both revenue and earnings 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. Currently, the most bullish analyst values ITM Power at UK£2.00 per share, while the most bearish prices it at UK£0.45. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting ITM Power's growth to accelerate, with the forecast 101% annualised growth to the end of 2025 ranking favourably alongside historical growth of 20% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that ITM Power is expected to grow much faster than its industry.