Last week, you might have seen that Fuel Tech, Inc. (NASDAQ:FTEK) released its second-quarter result to the market. The early response was not positive, with shares down 2.9% to US$1.00 in the past week. Revenue greatly exceeded expectations at US$7.0m, some 21% ahead of analyst forecasts. The analyst 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Fuel Tech after the latest results.
Taking into account the latest results, the consensus forecast from Fuel Tech's lone analyst is for revenues of US$28.8m in 2024. This reflects a decent 9.3% improvement in revenue compared to the last 12 months. Losses are forecast to balloon 179% to US$0.02 per share. Before this earnings announcement, the analyst had been modelling revenues of US$27.8m and losses of US$0.03 per share in 2024. So it seems there's been a definite increase in optimism about Fuel Tech's future following the latest consensus numbers, with a considerable decrease in the loss per share forecasts in particular.
The consensus price target rose 100% to US$4.00, with the analyst encouraged by the higher revenue and lower forecast losses for next year.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Fuel Tech's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 19% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 5.4% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.6% annually. So it looks like Fuel Tech is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that the analyst reconfirmed their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was also a nice increase in the price target, with the analyst clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Fuel Tech going out as far as 2026, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Fuel Tech , and understanding it should be part of your investment process.
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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.