Earnings Update: NN, Inc. (NASDAQ:NNBR) Just Reported Its Third-Quarter Results And Analysts Are Updating Their Forecasts
It's been a pretty great week for NN, Inc. (NASDAQ:NNBR) shareholders, with its shares surging 19% to US$3.93 in the week since its latest quarterly results. Results overall weren't great; even though revenues of US$131m beat expectations by 11%, statutory losses ballooned to US$0.13 per share, substantially worse than the analysts had expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, NN's three analysts are now forecasting revenues of US$525.5m in 2027. This would be a decent 8.8% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with NN forecast to report a statutory profit of US$0.07 per share. Before this earnings report, the analysts had been forecasting revenues of US$518.2m and earnings per share (EPS) of US$0.07 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
See our latest analysis for NN
There were no changes to revenue or earnings estimates or the price target of US$6.67, suggesting that the company has met expectations in its recent result. 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. The most optimistic NN analyst has a price target of US$7.00 per share, while the most pessimistic values it at US$6.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting NN is an easy business to forecast or the the analysts are all using similar assumptions.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that NN's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 7.0% growth to the end of 2027 on an annualised basis. That is well above its historical decline of 2.3% 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 7.0% annually. So it looks like NN is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$6.67, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on NN. Long-term earnings power is much more important than next year's profits. We have forecasts for NN going out to 2028, and you can see them free on our platform here.
You still need to take note of risks, for example - NN has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.
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