TPI Composites (TPIC) Outlook: Anticipating Negative Earnings Amid Revenue Decline

Wall Street analysts predict that TPI Composites (TPIC) will report a year-over-year increase in earnings despite facing lower revenues when it announces its earnings for the quarter ending September 2024. While this known expectation is essential for understanding the company's earnings situation, the stock price could be significantly influenced by how the actual results match these estimates.

The earnings report is scheduled for release on November 7, 2024, and positive key figures could lead the stock to rise, whereas any disappointing outcomes might cause it to fall.

Management's discussion of current business conditions during the earnings call will play a key role in determining the sustainability of any immediate price changes and shaping future earnings expectations. Therefore, it’s vital to analyze the likelihood of a positive earnings surprise.

Zacks Consensus Estimate

For TPI Composites, the anticipated quarterly loss is set at $0.19 per share, reflecting a significant year-over-year change of +88.9%.

Projected revenues stand at approximately $346.91 million, indicating a decline of 7% compared to the same quarter last year.

Estimate Revisions Trend

The consensus EPS estimate for the upcoming quarter has been adjusted downwards by 28.57% over the last month to its current figure. This revision indicates that analysts have re-evaluated their previous forecasts based on the latest available information.

It is important for investors to note that the general trend of estimate revisions may not fully reflect every individual analyst's changes.

Earnings Whisper

Revisions happening just before earnings releases can provide insights into the business conditions leading to these results. This understanding underpins the Zacks Earnings ESP (Expected Surprise Prediction) model.

The Zacks Earnings ESP compares the Most Accurate Estimate against the Zacks Consensus Estimate. The Most Accurate Estimate represents the most recent assessment of earnings, which may incorporate more timely information than consensus estimates derived previously.

Therefore, a positive or negative Earnings ESP reading gives an indication of how actual earnings might diverge from consensus expectations. However, positive Earnings ESP readings tend to be much more reliable predictors of potential earnings surprises.

When a positive Earnings ESP is paired with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold), it significantly enhances the likelihood of a positive surprise, with such combinations leading to positive surprises nearly 70% of the time. In contrast, a negative Earnings ESP does not forecast an earnings miss with high certainty, particularly when combined with lower Zacks Ranks (4 or 5).

Assessment of TPI Composites' Numbers

In the case of TPI Composites, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting a generally bearish sentiment among analysts toward the company's earnings outlook. This has led to an Earnings ESP of -49.62%.

Additionally, TPI Composites has a Zacks Rank of #4, further complicating predictions regarding the possibility of surpassing the consensus EPS estimate.

Past Earnings Surprise History Insights

To gauge future earnings potential, analysts often consider how well a company has historically met consensus estimates. TPI Composites' past performance shows it was expected to log a loss of $0.69 per share in the last quarter but instead reported a loss of $1.23, resulting in a surprise of -78.26%.

Over the last four quarters, the company has exceeded consensus EPS estimates only once.

Conclusion

It's crucial to note that whether a company beats or misses earnings expectations is not the only factor influencing its stock price; market reactions can vary despite such outcomes due to other disappointments or positive surprises. Nonetheless, investing in companies expected to surpass earnings forecasts increases success likelihood, making it important to check both a company's Earnings ESP and Zacks Rank ahead of quarterly reports. TPI Composites lacks the characteristics of a strong earnings candidate at this time, and investors should consider various factors before deciding whether to invest in this stock ahead of its earnings report.

Industry Comparisons

Looking within the Zacks Industrial Services sector, DMC Global (BOOM) is projected to report a loss of $0.09 per share for the quarter ending September 2024, which equates to a staggering year-over-year change of -118%. Its expected revenue is $152 million, down 11.7% from the previous year.

Recent revisions also indicate that the consensus EPS estimate for DMC Global has dropped significantly, down by 109.5% over the past month, leading to an Earnings ESP of -100.00%. Combined with a Zacks Rank of #4, it similarly presents a challenging scenario for DMC Global's potential to exceed EPS expectations.

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