Analysts Have Lowered Expectations For Proterra Inc. (NASDAQ:PTRA) After Its Latest Results

Proterra Inc. (NASDAQ:PTRA) missed gains with its most recent annual results, disappointing overly optimistic forecasters. Revenue fell slightly short of expectations, totaling $309 million, with a corresponding explosion in legal losses. Loss per share was $1.06, about 14% higher than analysts had forecast. Analysts typically update their forecasts with every earnings report, and their estimates allow us to assess whether their view of the company has changed or if there are any new concerns to be aware of. So we’ve collected the latest post-earnings forecasts to see what estimates are in store for next year.

Check out our latest analysis for Proterra

Following the latest results, Proterra’s six analysts are now forecasting revenue of $497.3 million in 2023. That would be a huge 61% increase in revenue compared to the last 12 months. Losses are expected to be contained, narrowing 11% year-on-year to $0.93. But before the recent gains, analysts had forecast 2023 revenue of $533.7 million and a loss of $0.97 per share. Sentiment seems to have picked up slightly in recent updates, with analysts getting a little more optimistic in their forecast for losses per share, even though sales numbers were slightly down.

The consensus price target fell 19% to $6.00, with the decline in sales estimates notably dampening sentiment despite projected losses narrowing. However, there is another way to think about target prices and that is the range of target prices suggested by analysts, as a wide range of estimates could suggest a different view of possible outcomes for the company. The most optimistic Proterra analyst has a price target of $9.00 per share, while the most bearish put it at $2.50. We would likely place less value on analysts’ forecasts in this situation, as such a wide range of estimates could mean the future of this business is difficult to accurately predict. As a result, it may not be a good idea to make decisions based on the consensus price target, which is, after all, just an average of this wide range of estimates.

We can also look at these estimates in the context of the bigger picture, e.g. B. how the forecasts compare to past performance and whether the forecasts are more or less optimistic compared to other companies in the industry. The latest estimates indicate that Proterra’s growth rate is likely to accelerate significantly, with projected annual revenue growth of 61% through the end of 2023, significantly faster than historical growth of 20% pa over the past three years. In contrast, our data suggests that other companies (with analyst coverage) in a similar industry are expected to post revenue growth of 4.8% per year. It seems obvious that while growth prospects are better than in the recent past, analysts also expect Proterra to grow faster than the industry as a whole.

The final result

The most obvious conclusion is that analysts haven’t changed their forecasts for a loss next year. Unfortunately, they’ve also revised down their revenue estimates, but the latest projections still suggest the business will grow faster than the industry as a whole. Nonetheless, earnings are more important to the company’s intrinsic value. Additionally, analysts have also lowered their price targets, suggesting that recent news has led to greater pessimism about the company’s intrinsic value.

Based on this train of thought, we believe the company’s long-term prospects are much more relevant than next year’s earnings. At Simply Wall St we have a full range of analyst estimates for Proterra through 2025 which you can view for free on our platform here.

However, there is still a need to consider the ever-present specter of investment risk. We have identified 4 warning signs with Proterra (at least 1, which is worrying) and understanding them should be part of your investment process.

Do you have any feedback about this article? Concerned about the content? Get in touch directly with us. Alternatively, send an email to the editorial team (at) simplywallst.com.

This Simply Wall St article is of a general nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.